**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

**FORM N-CSR**

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANANGEMENT INVESTMENT COMPANY

 

**Investment Company Act file number 811-02679**

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**DAVIS SERIES, INC.**

(Exact name of registrant as specified in charter)

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2949 East Elvira Road, Suite 101

Tucson, AZ 85756

(Address of principal executive offices)

 

Thomas D. Tays

Davis Selected Advisers, L.P.

2949 East Elvira Road, Suite 101

Tucson, AZ 85756

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: 520-806-7600

**Date of fiscal year end: December 31, 2009**

**Date of reporting period: June 30, 2009**

 

____________________

 

 

 

 

**ITEM 1. REPORT TO STOCKHOLDERS**

 

 

 

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| **DAVIS SERIES, INC.** | **Table of Contents** |
|------------------------|-----------------------|

 

 

| Shareholder Letter                       | 2      |
|------------------------------------------|--------|
|                                     |   |
| Management's Discussion and Analysis:    |   |
| Davis Opportunity Fund                   | 3      |
| Davis Government bond Fund               | 3      |
| Davis Financial Fund                     | 4      |
| Davis Appreciation & Income Fund     | 5      |
| Davis Real Estate Fund                   | 6      |
|                                     |   |
| Fund Overview:                           |   |
| Davis Opportunity Fund                   | 10     |
| Davis Government Bond Fund               | 11     |
| Davis Government Money Market Fund       | 12     |
| Davis Financial Fund                     | 13     |
| Davis Appreciation & Income Fund     | 14     |
| Davis Real Estate Fund                   | 15     |
|                                     |   |
| Expense Example                          | 16     |
|                                     |   |
| Schedule of Investments:                 |   |
| Davis Opportunity Fund                   | 19     |
| Davis Government Bond Fund               | 23     |
| Davis Government Money Market Fund       | 26     |
| Davis Financial Fund                     | 29     |
| Davis Appreciation & Income Fund     | 32     |
| Davis Real Estate Fund                   | 36     |
|                                     |   |
| Statements of Assets and Liabilities     | 39     |
|                                     |   |
| Statements of Operations                 | 41     |
|                                     |   |
| Statements of Changes in Net Assets      | 42     |
|                                     |   |
| Notes to Financial Statements            | 44     |
|                                     |   |
| Financial Highlights                     | 57     |
|                                     |   |
| Fund Information                         | 65     |
|                                     |   |
| Director Approval of Advisory Agreements | 66     |
|                                     |   |
| Directors and Officers                   | 70     |

 

 

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**DAVIS SERIES,            INC.**                                                                                                                                     **Shareholder Letter**

 

Dear Fellow Shareholder,

 

As stewards of our customers’ savings, the management team and Directors of the Davis Funds recognize the importance of candid, thorough, and regular communication with our shareholders. In our Annual and Semi-Annual Reports we include all of the required quantitative information such as financial statements, detailed footnotes, performance reports, fund holdings, and            performance attribution. 

 

In addition, we produce a Research Report for certain funds, which is published semi-annually. In this report, we give a more qualitative perspective on fund performance, discuss our thoughts on individual holdings, and share our investment outlook. You may obtain a copy of the current Research Report either on our website, www.davisfunds.com, or by calling            1-800-279-0279.

 

We thank you for your continued trust. We will do our best to earn it in the years ahead.

 

Sincerely,

 

 

 

Christopher C. Davis

President

 

August 3, 2009

 

2

 

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**DAVIS SERIES,            INC.**                                                                                       **Management’s Discussion and Analysis**

 

**Davis Opportunity Fund**

Davis Opportunity Fund’s Class A shares delivered a return on net asset value of 17.17% for the six-month period ended June 30, 20091. Over the same time period, the Russell 3000**®**Index2 (“Index”) returned 4.20%. The sectors3 within the Index that turned in the strongest performance            over the six-month period were information technology, materials, and consumer discretionary. The sectors that turned in the weakest performance over the six-month period were financials, industrials, and telecommunication services.

**Factors Impacting the Fund’s Performance**

Information technology companies were the most important contributor4 to the performance of both the Fund and the Index. The Fund’s information technology companies out-performed the corresponding sector within the Index (up 31% versus up 25% for the Index). The Fund’s performance also benefited from a higher relative average weighting in this strongly performing sector (22%            versus 17% for the Index). Google5, Texas Instruments, Microsoft, and Agilent Technologies were among the most important contributors to performance. 

The Fund’s investment in health care companies made important contributions to performance. The Fund’s health care companies out-performed the corresponding sector within the Index (up 20% versus up 2% for the Index). Schering-Plough was among the most important contributors to performance. Johnson & Johnson was among the most important detractors from performance.

The Fund had more invested in consumer discretionary companies than in any other sector over the period, and these companies made important contributions to performance. The Fund’s consumer discretionary companies out-performed the corresponding sector within the Index (up 13% versus up 12% for the Index). The Fund’s performance also benefited from a higher relative average weighting in            this strongly performing sector (22% versus 10% for the Index). Netflix and Hunter Douglas were among the most important contributors to performance. Comcast, Lagardere, H&R Block, and News Corp. were among the most important detractors from performance. The Fund no longer owns Netflix.

Other important contributors to performance included Transocean, Level 3 Communications, and Sino-Forest. Other important detractors from performance included Blount International, Siemens, and Devon Energy.

The Fund ended the six-month period with approximately 17% of its net assets in foreign companies. As a whole, these companies out-performed the Index but under-performed the domestic companies held by the Fund. 

 

**Davis Government Bond Fund**

Davis Government Bond Fund’s Class A shares returned 1.80% on net asset value for the six-month period ended June 30, 20091. Over the same time period, the Citigroup U.S. Treasury/Agency 1-3 Year Index2 (“Index”) returned 0.32%. The Fund’s investment strategy, under normal circumstances, is to invest exclusively in U.S. Government securities and repurchase            agreements, collateralized by U.S. Government securities, with a weighted average maturity of three years or less. 

**Factors Impacting the Fund’s Performance**

The most important contributor to the Fund’s performance relative to the Index was that the Fund was invested heavily in mortgage-backed securities. Mortgage-backed securities out-performed both treasury and agency securities over the six-month period. Other important factors contributing to the Fund’s performance against the Index included a faster than anticipated pre-payment rate on            mortgage-backed securities purchased at a discount and the yield advantage that the Fund enjoyed over the Index. The Fund’s individual security selection was the most important detractor from performance relative to the Index.

 

 

3

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

**Davis Financial Fund**

Davis Financial Fund’s Class A shares delivered a return on net asset value of 14.91% for the six-month period ended June 30, 20091. Over the same time period, the Standard & Poor’s 500® Index2 (“Index”) returned 3.16%. Financial companies as a whole turned in a negative performance as the sector3 lost value for the Index. The            Index’s banking and insurance industry groups turned in negative performances, while the diversified financial industry group turned in a positive performance. 

**Factors Impacting the Fund’s Performance**

The specific financial companies which the Fund owned out-performed the majority of financial companies in the Index (up 14% versus down 3% for the Index). The Fund’s non-financial holdings overall contributed4 positively to performance. 

The Fund’s diversified financial companies out-performed the corresponding industry group within the Index (up 21% versus up 11% for the Index), and were the largest contributors to performance. Goldman Sachs5, American Express, Julius Baer, Moody’s, and Oaktree Capital were among the most important contributors to performance. JPMorgan Chase and Bank of America were among the            most important detractors from performance. 

The Fund’s banking companies out-performed the corresponding industry group within the Index (up 33% versus down 21% for the Index). Wells Fargo and State Bank of India were among the most important contributors to performance. 

The Fund’s insurance companies out-performed the corresponding industry group within the Index (basically flat versus down 11% for the Index). Transatlantic Holdings was among the most important contributors to performance. FPIC Insurance Group, American International Group, Markel, Loews, ACE Ltd., MBIA, and Everest Re Group were among the most important detractors from performance. The Fund no            longer owns American International Group or MBIA.

Other important contributors to performance included Canadian Natural Resources and Sealed Air. H&R Block was an important detractor from performance.

The Fund ended the six-month period with approximately 23% of its net assets invested in foreign companies. As a whole these companies out-performed the domestic companies held by the Fund. 

The Fund received a favorable class action settlement from a company that it no longer owns. This settlementhad a material impact on the investment performance of the Fund in 2009.  This was a one-time event that is unlikely to be repeated.

 

4

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

**Davis Appreciation & Income Fund**

Davis Appreciation & Income Fund’s Class A shares delivered a return on net asset value of 18.99% for the six-month period ended June 30, 20091. Over the same time period, the Standard & Poor’s 500® Index2 (“Index”) returned 3.16%. The sectors3 within the Index that turned in the strongest performance over the six-month            period were information technology, materials, and consumer discretionary. The sectors that turned in the weakest performance over the six-month period were industrials, telecommunication services, and financials.

**Factors Impacting the Fund’s Performance**

The Fund’s strong performance was primarily the result of its common stock investments. The Fund’s common stock holdings out-performed the Index (up 20% versus up 3% for the Index) and were the primary contributors4 to performance. Common stock holdings in Whole Foods5, Tyson Foods, Kohl’s, Amazon.com, and Quanta Services were among the most important            contributors to performance. Common stock holdings in Waste Connections, General Electric, Devon Energy, United Rentals, Masco, and Ambac Financial Group were among the most important detractors from performance. 

The Fund’s investments in convertible and corporate bonds also out-performed the Index (up 14% versus up 3% for the Index). Convertible bond holdings in Forest City Enterprises and School Specialty were among the most important contributors to performance. Convertible bond holdings in Vornado Realty and Intel, along with Thornburg Mortgage, a corporate bond, were among the most important            detractors from performance. The Fund no longer owns Vornado Realty.

The Fund’s investments in convertible preferred stocks also contributed to performance. Convertible preferred stock holdings in AES Trust, Citigroup, and Freeport-McMoRan were among the most important contributors to performance, while Continental Airlines was among the most important detractors from performance.

 

5

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

**Davis Real Estate Fund**

Davis Real Estate Fund’s Class A shares delivered a negative return on net asset value of 6.44% for the six-month period ended June 30, 20091. Over the same time period, the Wilshire U.S. Real Estate Securities Index2 (“Index”) declined 12.75%. Six of the seven sub-industries3 within the Index delivered negative returns, with industrial REITs,            residential REITs, and diversified REITs turning in the weakest performance. Only the real estate operating companies sub-industry delivered positive returns.

**Factors Impacting the Fund’s Performance**

Retail REITs were the most important contributors4 to the Fund’s performance. The Fund’s retail REITs out-performed the corresponding sub-industry within the Index (up 5% versus down 13% for the Index). Simon Property Group5 and General Growth Properties were among the most important contributors to performance. The Fund no longer owns Simon Property Group or General            Growth Properties. 

Convertible bond securities issued by Prologis, SL Green, and Digital Realty made important contributions to performance. While real estate equities struggled and turned in negative performances on average, these three real estate convertible bond securities delivered an average return of approximately 66%.

The Fund’s office REITs out-performed the corresponding sub-industry within the Index (down 11% versus down 12% for the Index), but were still the largest detractors from performance. SL Green was among the most important contributors to performance. Alexandria Real Estate, Douglas Emmett, Derwent London, and Boston Properties were among the most important detractors from performance. The Fund            no longer owns Derwent London.

Industrial REITs were important detractors from performance. The Fund’s industrial REITs under-performed the corresponding sub-industry within the Index (down 32% versus down 23% for the Index). Brixton was among the most important detractors from performance. The Fund no longer owns Brixton.

Diversified REITs were also important detractors from performance. The Fund’s diversified REITs under-performed the corresponding sub-industry within the Index (down 34% versus down 16% for the Index). The Fund had a lower relative average weighting (5% versus 9% for the Index) in this weakly performing sub-industry. Cousins Properties was among the most important detractors from performance.            

Forest City Enterprises, Host Hotels & Resorts, and St. Joe were among the most important companies contributing to performance. Cogdell Spencer and Essex Property Trust were among the most important companies detracting from performance.

 

6

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

This Semi-Annual Report is authorized for use by existing shareholders. Prospective shareholders must receive a current Davis Series, Inc. prospectus, which contains more information about investment strategies, risks, charges, and expenses. Please read the prospectus carefully before investing or sending money.

Davis Opportunity Fund’s investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Davis Opportunity Fund are: (1) market risk, (2) company risk, (3) small- and medium-capitalization risk, (4) foreign country risk, (5) headline risk, and (6) selection risk. See the prospectus for a full            description of each risk.

Davis Government Bond Fund’s investment objective is current income. There can be no assurance that the Fund will achieve its objective. The primary risk of an investment in Davis Government Bond Fund is interest rate risk, consisting of: (1) price volatility risk, (2) extension and prepayment risk, and (3) credit risk. See the prospectus for a full description of each risk.

Davis Financial Fund’s investment objective is long-term growth of capital. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Davis Financial Fund are: (1) market risk, (2) company risk, (3) concentrated financial services portfolio risk, (4) foreign country risk, (5) headline risk, and (6) selection risk. See the prospectus for a full            description of each risk.

Davis Financial Fund concentrates its investments in the financial sector, and it may be subject to greater risks than a fund that does not concentrate its investments in a particular sector. The Fund’s investment performance, both good and bad, is expected to reflect the economic performance of the financial sector more than a fund that does not concentrate its portfolio.

Davis Appreciation & Income Fund’s investment objective is total return through a combination of growth and income. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Davis Appreciation & Income Fund are: equity risks, including (1) market risk, (2) company risk, (3) small- and medium-capitalization risk, (4) foreign country risk,            (5) headline risk, and (6) selection risk; and debt risks, including (1) interest rate sensitivity, (2) changes in debt rating, and (3) credit risk, including debt rated less than investment grade. See the prospectus for a full description of each risk. 

Davis Real Estate Fund’s investment objective is total return through a combination of growth and income. There can be no assurance that the Fund will achieve its objective. The primary risks of an investment in Davis Real Estate Fund are: (1) market risk, (2) company risk, (3) concentrated real estate portfolio risk, (4) focused portfolio risk, (5) small- and medium-capitalization risk, (6)            foreign country risk, (7) headline risk, and (8) selection risk. See the prospectus for a full description of each risk.

Davis Real Estate Fund concentrates its investments in the real estate sector, and it may be subject to greater risks than a fund that does not concentrate its investments in a particular sector. The Fund’s investment performance, both good and bad, is expected to reflect the economic performance of the real estate sector much more than a fund that does not concentrate its portfolio.

Davis Real Estate Fund is allowed to focus its investments in fewer companies, and it may be subject to greater risks than a more diversified fund that is not allowed to focus its investments in a few companies. Should the portfolio manager determine that it is prudent to focus the Fund’s portfolio in a few companies, the Fund’s investment performance, both good and bad, is expected to            reflect the economic performance of its more focused portfolio.

 

7

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

1    Total return assumes reinvestment of dividends and capital gain distributions. Past performance is not a guarantee of future results. Investment return and principal value will vary so that, when redeemed, an investor’s shares may be worth more or less than when purchased. The following tables list the average annual total returns for the periods ended June 30,            2009 and the annualized operating expense ratios for the six-month period ended June 30, 2009.

 

|   | *(without a 4.75% sales charge taken into consideration)* |
|--------|-----------------------------------------------------------|

|                                      |       |       |        |              | **EXPENSE** |
|-------------------------------------------|------------|------------|-------------|-------------------|-------------|
| **FUNDNAME**                              | **1-YEAR** | **5-YEAR** | **10-YEAR** | **INCEPTION**     | **RATIO**   |
| Davis Opportunity – A*              | (21.81)%   | (2.42)%    | 3.25%       | 8.64% - 12/01/94  | 1.30%       |
| Davis Government Bond – A           | 4.56%      | 3.54%      | 3.98%       | 4.55% - 12/01/94  | 0.73%       |
| Davis Financial – A **              | (21.56)%   | (3.93)%    | 0.29%       | 10.92% - 05/01/91 | 1.18%       |
| Davis Appreciation & Income – A | (23.29)%   | (1.03)%    | 1.14%       | 7.10% - 05/01/92  | 1.19%       |
| Davis Real Estate – A               | (45.98)%   | (4.30)%    | 3.91%       | 6.92% - 01/03/94  | 1.54%       |

 

|   | *(with a 4.75% sales charge taken into consideration)* |
|--------|--------------------------------------------------------|

| **FUNDNAME**                              | **1-YEAR** | **5-YEAR** | **10-YEAR** | **INCEPTION**     |
|-------------------------------------------|------------|------------|-------------|-------------------|
| Davis Opportunity – A*              | (25.52)%   | (3.36)%    | 2.75%       | 8.27% - 12/01/94  |
| Davis Government Bond – A           | (0.43)%    | 2.53%      | 3.47%       | 4.20% - 12/01/94  |
| Davis Financial – A **              | (25.29)%   | (4.86)%    | (0.20)%     | 10.63% - 05/01/91 |
| Davis Appreciation & Income – A | (26.94)%   | (1.99)%    | 0.65%       | 6.80% - 05/01/92  |
| Davis Real Estate – A               | (48.54)%   | (5.23)%    | 3.41%       | 6.59% - 01/03/94  |

 

|                                       |       |       |        | **SINCEFUNDS'**  |
|--------------------------------------------|------------|------------|-------------|------------------|
| **BENCHMARKINDEX**                         | **1-YEAR** | **5-YEAR** | **10-YEAR** | **INCEPTION**    |
| Russell 3000® Index                    | (26.56)%   | (1.84)%    | (1.46)%     | 7.02% - 12/01/94 |
| Citigroup U.S. Treasury/Agency             |       |       |        |             |
| 1-3 Year Index                             | 4.88%      | 4.21%      | 4.74%       | 5.35% - 12/01/94 |
| Standard & Poor’s 500® Index | (26.21)%   | (2.24)%    | (2.22)%     | 7.15% - 05/01/91 |
|                                       |       |       |        | 6.88% - 05/01/92 |
| Wilshire U.S. Real Estate Securities       |       |       |        |             |
| Index                                      | (45.65)%   | (3.41)%    | 5.18%       | 6.79% - 01/03/94 |

Fund performance changes over time and current performance may be higher or lower than stated. Returns and expense ratios for other classes of shares will vary from the above returns and expense ratios. The operating expense ratios may vary in future years. For more current information please call Davis Funds Investor Services at 1-800-279-0279.

*   In 1999 and 2000 the Davis Opportunity Fund made favorable investments in initial public offerings (IPOs), which improved short-term performance. These markets were unusual and such performance may not continue in the future.

** The Davis Financial Fund received a favorable class action settlement from a company that it no longer owns. This settlementhad a material impact on the investment performance of the Fund in 2009.  This was a one-time event that is unlikely to be repeated.

 

8

 

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**DAVIS SERIES,            INC.**                                                               **Management’s Discussion and Analysis –            (Continued)**

 

| 2 | The definitions of indices quoted in this report appear below. Investments cannot be made directly in the indices. |
|---|--------------------------------------------------------------------------------------------------------------------|

I.   The Russell 3000® Index measures the performance of the 3,000 largest companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.

II.  The Citigroup U.S. Treasury/Agency 1-3 Year Index is a recognized unmanaged index of short-term U.S. Government Securities’ performance. 

III. The Standard & Poor’s 500® Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange. The Index is adjusted for dividends, weighted towards stocks with large market capitalizations, and represents approximately two-thirds of the total market value of all domestic common stocks.

IV. The Wilshire U.S. Real Estate Securities Index is a broad measure of the performance of publicly traded real estate securities. The Index was formerly named the “Dow Jones Wilshire Real Estate Securities Index.”

3     The companies included in the Standard & Poor’s 500® Index and the Russell 3000® Index are divided into ten sectors. One or more industry groups make up a sector. The companies included in the Wilshire U.S. Real Estate Securities Index are divided into seven sub-industries.

4     A company’s or sector’s contribution to or detraction from the Fund’s performance is a product both of its appreciation or depreciation and its weighting within the Fund. For example, a 5% holding that rises 20% has twice as much impact as a 1% holding that rises 50%.

5    This Management Discussion and Analysis discusses a number of individual companies. The information provided in this report does not provide information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. The Schedule of Investments lists each Fund’s holdings of            each company discussed. 

Shares of the Davis Funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including possible loss of the principal amount invested.

 

9

 

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**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS OPPORTUNITY FUND** | **At June 30, 2009*****(Unaudited)*** |
|----------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Industry Weightings**        |
|------------------------------------|---------|--------------------------------|
| **(% of Fund’s Net Assets)** |    | **(% of Long Term Portfolio)** |
|                               |    |                           |   |  

**Russell 3000 Fund®** |
| Common Stock (U.S.)                | 79.32%  |                           | Information Technology | 22.13% | 18.53% |
| Common Stock (Foreign)             | 16.99%  |                           | Health Care | 18.58% | 13.77% |
| Convertible Bonds                  | 1.17%   |                           | Media | 11.60% | 2.61% |
| Short Term Investments             | 2.52%   |                           | Diversified Financials | 8.98% | 6.47% |
|                               | 100.00% |                           | Energy | 7.23% | 11.27% |
|                               |    |                           | Materials | 6.09% | 3.75% |
|                               |    |                           | Capital Goods | 5.25% | 7.48% |
|                               |    |                           | Insurance | 4.54% | 2.71% |
|                               |    |                           | Consumer Durables & Apparel | 4.35% | 1.18% |
|                               |    |                           | Consumer Services | 3.54% | 2.16% |
|                               |    |                           | Other | 1.84% | 20.73% |
|                               |    |                           | Commercial & Professional |   |   |
|                               |    |                           | Services | 1.77% | 1.08% |
|                               |    |                           | Transportation | 1.57% | 1.88% |
|                               |    |                           | Telecommunication Services | 1.39% | 3.23% |
|                               |    |                           | Banks | 1.14% | 3.15% |
|                               |    |                           |   | 100.00% | 100.00% |
|                               |    |                           |   |   |   |
|                               |    |                           |   |   |   |

 

 

**Top 10 Holdings**

**(% of Fund’s Net Assets)**

|                               |                                               |   |
|------------------------------------|----------------------------------------------------|--------|
| Schering-Plough Corp.              | Pharmaceuticals, Biotechnology & Life Sciences | 6.19%  |
| Google Inc., Class A               | Software & Services                            | 6.09%  |
| Johnson & Johnson              | Pharmaceuticals, Biotechnology & Life Sciences | 5.21%  |
| Microsoft Corp.                    | Software & Services                            | 3.74%  |
| Texas Instruments Inc.             | Semiconductors & Semiconductor Equipment       | 3.54%  |
| Walt Disney Co.                    | Media                                              | 3.40%  |
| Comcast Corp., Special Class A     | Media                                              | 3.28%  |
| Oaktree Capital Group LLC, Class A | Diversified Financial Services                     | 3.22%  |
| Transocean Ltd.                    | Energy                                             | 3.13%  |
| Yum! Brands, Inc.                  | Consumer Services                                  | 2.80%  |

 

 

10

 

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**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS GOVERNMENT BOND FUND** | **At June 30, 2009*****(Unaudited)*** |
|--------------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Industry Weightings** |                                |
|------------------------------------|---------|-------------------------|-------------------------------------|
| **(% of Fund’s Net Assets)** |    | **(% of Fixed Income)** |                                |
|                               |    |                    |                                |   |   |
| Fixed Income                       | 94.15%  |                    | Collateralized Mortgage Obligations | 49.30% |   |
| Short Term Investments             | 5.71%   |                    | Freddie Mac Mortgage Pools          | 21.53% |   |
| Other Assets & Liabilities     | 0.14%   |                    | Fannie Mae Mortgage Pools           | 17.98% |   |
|                               | 100.00% |                    | Government Agency Notes             | 9.24% |   |
|                               |    |                    | Ginnie Mae Mortgage Pools           | 1.25% |   |
|                               |    |                    | Private Export Funding              | 0.70% |   |
|                               |    |                    |                                | 100.00% |   |

 

 

**Top 10 Fixed Income Holdings**

**(% of Fund’s Net Assets)**

|                                          |                                |   |
|-----------------------------------------------|-------------------------------------|--------|
| Fannie Mae, 4.00%, 12/25/20                   | Collateralized Mortgage Obligations | 4.13%  |   |
| Ginnie Mae, 4.00%, 11/20/30                   | Collateralized Mortgage Obligations | 3.03%  |   |
| Ginnie Mae, 5.00%, 02/16/32                   | Collateralized Mortgage Obligations | 3.03%  |   |
| Fannie Mae, 4.00%, 04/01/19, Pool No. MA0045  | Fannie Mae Mortgage Pools           | 2.95%  |   |
| Freddie Mac, 4.00%, 08/15/23                  | Collateralized Mortgage Obligations | 2.81%  |   |
| Freddie Mac, 4.50%, 05/01/10, Pool No. M80818 | Freddie Mac Mortgage Pools          | 2.69%  |   |
| Ginnie Mae, 5.00%, 08/20/32                   | Collateralized Mortgage Obligations | 2.57%  |   |
| Fannie Mae, 4.50%, 04/25/17                   | Collateralized Mortgage Obligations | 2.38%  |   |
| Fannie Mae, 4.25%, 12/25/22                   | Collateralized Mortgage Obligations | 2.38%  |   |
| Freddie Mac, 4.00%, 03/01/10, Pool No. M80806 | Freddie Mac Mortgage Pools          | 2.29%  |   |
|                                               |                                     |        |  |  |

 

 

11

 

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**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS GOVERNMENT MONEY MARKET FUND** | **At June 30, 2009*****(Unaudited)*** |
|----------------------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Maturity Diversification**  |         |
|------------------------------------|---------|-------------------------------|--------------|
| **(% of Fund’s Net Assets)** |    | **(% of Portfolio Holdings)** |         |
|                               |    |                          |         |   |   |
| Federal Home Loan Bank             | 30.02%  |                          | 0-30 Days    | 47.47% |   |
| Repurchase Agreements              | 26.36%  |                          | 31-90 Days   | 4.84% |   |
| Fannie Mae                         | 10.78%  |                          | 91-180 Days  | 39.99% |   |
| Freddie Mac                        | 10.77%  |                          | 181-397 Days | 7.70% |   |
| Other Agencies                     | 4.58%   |                          |         | 100.00% |   |
| Federal Farm Credit Bank           | 3.54%   |                          |         |   |   |
| Freddie Mac Mortgage Pools         | 3.34%   |                          |         |   |   |
| Fannie Mae Mortgage Pools          | 3.29%   |                          |         |   |   |
| Other Assets & Liabilities     | 7.32%   |                          |         |   |   |
|                               | 100.00% |                          |         |   |   |
|                               |    |                          |         |   |   |
|                               |    |                          |         |   |   |
|                               |    |                          |         |   |   |
|                               |    |                          |         |   |   |
|                               |    |                          |         |   |   |

 

 

The maturity dates of floating rate securities used in the Maturity Diversification chart are considered to be the effective maturities, based on the reset dates of the securities’ variable rates. See the Fund’s Schedule of Investments for a listing of the floating rate securities.

 

 

 

 

 

12

 

----

**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS FINANCIAL FUND** | **At June 30, 2009*****(Unaudited)*** |
|--------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Industry Weightings**   |
|------------------------------------|---------|---------------------------|
| **(% of Fund’s Net Assets)** |    | **(% of Stock Holdings)** |
|                               |    |                      |   | **Fund** | **S&P 500**® |
| Common Stock (U.S.)                | 75.74%  |                      | Diversified Financials | 40.44% | 7.41% |
| Common Stock (Foreign)             | 23.00%  |                      | Insurance | 33.75% | 2.35% |
| Short Term Investments             | 1.46%   |                      | Banks | 13.02% | 2.83% |
| Other Assets & Liabilities     | (0.20)% |                      | Energy | 5.04% | 12.42% |
|                               | 100.00% |                      | Commercial & Professional Services | 3.51% | 0.71% |
|                               |    |                      | Materials | 3.01% | 3.23% |
|                               |    |                      | Consumer Services | 1.23% | 1.76% |
|                               |    |                      | Information Technology | – | 18.40% |
|                               |    |                      | Health Care | – | 13.97% |
|                               |    |                      | Capital Goods | – | 7.09% |
|                               |    |                      | Food, Beverage & Tobacco | – | 6.08% |
|                               |    |                      | Other | – | 23.75% |
|                               |    |                      |   | 100.00% | 100.00% |
|                               |    |                      |   |   |   |

 

 

**Top 10 Holdings**

**(% of Fund’s Net Assets)**

|                               |                           |   |
|------------------------------------|--------------------------------|--------|
| Transatlantic Holdings, Inc.       | Reinsurance                    | 10.61% |
| American Express Co.               | Consumer Finance               | 7.96%  |
| Loews Corp.                        | Multi-line Insurance           | 7.08%  |
| Wells Fargo & Co.              | Commercial Banks               | 6.33%  |
| State Bank of India Ltd., GDR      | Commercial Banks               | 5.74%  |
| Julius Baer Holding AG             | Capital Markets                | 5.30%  |
| Canadian Natural Resources Ltd.    | Energy                         | 4.98%  |
| Bank of New York Mellon Corp.      | Capital Markets                | 4.93%  |
| Oaktree Capital Group LLC, Class A | Diversified Financial Services | 4.16%  |
| Goldman Sachs Group, Inc.          | Capital Markets                | 4.08%  |

 

 

13

 

----

**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS APPRECIATION & INCOME FUND** | **At June 30, 2009*****(Unaudited)*** |
|------------------------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Industry Weightings**        |
|------------------------------------|---------|--------------------------------|
| **(% of Fund’s Net Assets)** |    | **(% of Long Term Portfolio)** |
|                               |    |                           |   |  

**Fund** |  

**S&P 500**® |
| Common Stock (U.S.)                | 49.44%  |                           | Real Estate | 15.57% | 1.01% |
| Convertible Bonds                  | 33.73%  |                           | Commercial & Professional Services | 12.75% | 0.71% |
| Convertible Preferred Stocks       | 11.80%  |                           | Capital Goods | 11.98% | 7.09% |
| Corporate Bonds                    | 3.46%   |                           | Diversified Financials | 7.86% | 7.41% |
| Short Term Investments             | 1.43%   |                           | Food, Beverage & Tobacco | 7.12% | 6.08% |
| Other Assets & Liabilities     | 0.14%   |                           | Retailing | 6.51% | 3.21% |
|                               | 100.00% |                           | Materials | 6.43% | 3.23% |
|                               |    |                           | Energy | 5.85% | 12.42% |
|                               |    |                           | Information Technology | 5.61% | 18.40% |
|                               |    |                           | Utilities | 5.18% | 4.09% |
|                               |    |                           | Food & Staples Retailing | 4.63% | 3.05% |
|                               |    |                           | Media | 4.33% | 2.58% |
|                               |    |                           | Health Care | 3.22% | 13.97% |
|                               |    |                           | Household & Personal Products | 2.18% | 2.84% |
|                               |    |                           | Other | 0.78% | 13.91% |
|                               |    |                           |   | 100.00% | 100.00% |
|                               |    |                           |   |   |   |

 

 

**Top 10 Holdings**

**(% of Fund’s Net Assets)**

|                                                                      |                                   |   |
|---------------------------------------------------------------------------|----------------------------------------|--------|
| School Specialty, Inc., Conv. Sub. Notes, 3.75%/Zero

coupon, 08/01/23    | Commercial & Professional Services | 5.57%  |
| Forest City Enterprises, Inc., Class A, Conv. Sr. Notes, 3.625%, 10/15/11 | Real Estate                            | 4.96%  |
| Whole Foods Market, Inc.                                                  | Food & Staples Retailing           | 4.56%  |
| Quanta Services, Inc.                                                     | Capital Goods                          | 4.45%  |
| Kohl's Corp.                                                              | Retailing                              | 4.17%  |
| Tyson Foods, Inc., Conv. Sr. Notes, 3.25%, 10/15/13                       | Food, Beverage & Tobacco           | 3.78%  |
| Citigroup Inc., 6.50%, Conv. Pfd.                                         | Diversified Financial Services         | 3.60%  |
| AES Trust III, 6.75%, Conv. Pfd.                                          | Utilities                              | 3.30%  |
| Tyson Foods, Inc., Class A                                                | Food, Beverage & Tobacco           | 3.23%  |
| Devon Energy Corp.                                                        | Energy                                 | 3.18%  |

 

 

14

 

----

**DAVIS SERIES,            INC.**                                                                                                                                     **Fund Overview**

| **DAVIS REAL ESTATE FUND** | **At June 30, 2009*****(Unaudited)*** |
|----------------------------|---------------------------------------|

 

 

| **Portfolio Composition**          |    | **Industry Weightings**        |                               |
|------------------------------------|---------|--------------------------------|------------------------------------|
| **(% of Fund’s Net Assets)** |    | **(% of Long Term Portfolio)** |                               |
|                               |    |                           |                               |   |   |   |
|                               |    |                           |                               |   | **Wilshire U.S.** |   |
| Common Stock (U.S.)                | 77.75%  |                           |                               |   | **Real Estate** |   |
| Common Stock (Foreign)             | 2.12%   |                           |                               | **Fund** | **Securities Index** |   |
| Preferred Stock                    | 8.80%   |                           | Office REITs                       | 33.30% | 16.68% |   |
| Convertible Bonds                  | 4.54%   |                           | Residential REITs                  | 12.66% | 15.13% |   |
| Short Term Investments             | 5.62%   |                           | Retail REITs                       | 10.28% | 23.63% |   |
| Other Assets & Liabilities     | 1.17%   |                           | Industrial REITs                   | 8.96% | 6.22% |   |
|                               | 100.00% |                           | Specialized REITs                  | 8.04% | 26.91% |   |
|                               |    |                           | Transportation                     | 7.88% | – |   |
|                               |    |                           | Real Estate Operating Companies    | 6.84% | 2.06% |   |
|                               |    |                           | Diversified REITs                  | 5.06% | 9.37% |   |
|                               |    |                           | Diversified Real Estate Activities | 4.71% | – |   |
|                               |    |                           | Capital Markets                    | 2.27% | – |   |
|                               |    |                           |                               | 100.00% | 100.00% |   |
|                                    |         |                                |                                    |  |  |  |  |

 

 

**Top 10 Holdings**

**(% of Fund’s Net Assets)**

|                                   |                               |   |   |
|----------------------------------------|------------------------------------|--------|--------|
| American Campus Communities, Inc.      | Residential REITs                  | 7.72%  |
| Forest City Enterprises, Inc., Class A | Real Estate Operating Companies    | 6.37%  |
| Corporate Office Properties Trust      | Office REITs                       | 5.68%  |
| Ventas, Inc.                           | Specialized REITs                  | 5.18%  |
| SL Green Realty Corp.                  | Office REITs                       | 4.64%  |
| St. Joe Co.                            | Diversified Real Estate Activities | 4.39%  |
| Burlington Northern Santa Fe Corp.     | Transportation                     | 4.06%  |
| Federal Realty Investment Trust        | Retail REITs                       | 3.98%  |
| DCT Industrial Trust Inc.              | Industrial REITs                   | 3.78%  |
| Essex Property Trust, Inc.             | Residential REITs                  | 3.58%  |
|                                        |                                    |        |        |  |  |

 

 

15

 

----

**DAVIS SERIES,            INC.**                                                                                                          **Expense Example*****(Unaudited)***

 

 

|                                                         | **Beginning**     | **Ending**        | **Expenses Paid**       |
|--------------------------------------------------------------|-------------------|-------------------|-------------------------|
|                                                         | **Account Value** | **Account Value** | **During Period***      |
|                                                         | **(01/01/09)**    | **(06/30/09)**    | **(01/01/09-06/30/09)** |
| **Davis Opportunity Fund**                                   |              |              |                    |
| **Class A**(annualized expense ratio 1.30%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,171.69         | $7.00                   |
| Hypothetical                                                 | $1,000.00         | $1,018.35         | $6.51                   |
| **Class B**(annualized expense ratio 2.27%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,165.00         | $12.19                  |
| Hypothetical                                                 | $1,000.00         | $1,013.54         | $11.33                  |
| **Class C**(annualized expense ratio 2.10%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,167.46         | $11.29                  |
| Hypothetical                                                 | $1,000.00         | $1,014.38         | $10.49                  |
| **Class Y**(annualized expense ratio 0.91%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,174.00         | $4.91                   |
| Hypothetical                                                 | $1,000.00         | $1,020.28         | $4.56                   |
|                                                         |              |              |                    |
| **Davis Government Bond Fund**                               |              |              |                    |
| **Class A**(annualized expense ratio 0.73%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,017.96         | $3.65                   |
| Hypothetical                                                 | $1,000.00         | $1,021.17         | $3.66                   |
| **Class B**(annualized expense ratio 1.65%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,011.78         | $8.23                   |
| Hypothetical                                                 | $1,000.00         | $1,016.61         | $8.25                   |
| **Class C**(annualized expense ratio 1.58%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,013.83         | $7.89                   |
| Hypothetical                                                 | $1,000.00         | $1,016.96         | $7.90                   |
| **Class Y**(annualized expense ratio 0.63%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,018.66         | $3.15                   |
| Hypothetical                                                 | $1,000.00         | $1,021.67         | $3.16                   |
|                                                         |              |              |                    |
| **Davis Government Money Market Fund**                       |              |              |                    |
| **Class A, B, C, & Y**(annualized expense ratio 0.57%**) |              |              |                    |
| Actual                                                       | $1,000.00         | $1,002.37         | $2.83                   |
| Hypothetical                                                 | $1,000.00         | $1,021.97         | $2.86                   |
|                                                         |              |              |                    |
| **Davis Financial Fund**                                     |              |              |                    |
| **Class A**(annualized expense ratio 1.18%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,149.09         | $6.29                   |
| Hypothetical                                                 | $1,000.00         | $1,018.94         | $5.91                   |
| **Class B**(annualized expense ratio 2.39%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,141.52         | $12.69                  |
| Hypothetical                                                 | $1,000.00         | $1,012.94         | $11.93                  |
| **Class C**(annualized expense ratio 2.10%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,143.92         | $11.16                  |
| Hypothetical                                                 | $1,000.00         | $1,014.38         | $10.49                  |
| **Class Y**(annualized expense ratio 1.09%**)                |              |              |                    |
| Actual                                                       | $1,000.00         | $1,149.30         | $5.81                   |
| Hypothetical                                                 | $1,000.00         | $1,019.39         | $5.46                   |
|                                                              |                   |                   |                         |  |  |  |

 

 

16

 

----

**DAVIS SERIES,            INC.**                                                                                            **Expense Example*****(Unaudited)*****– (Continued)**

 

 

|                                          | **Beginning**     | **Ending**        | **Expenses Paid**       |
|-----------------------------------------------|-------------------|-------------------|-------------------------|
|                                          | **Account Value** | **Account Value** | **During Period***      |
|                                          | **(01/01/09)**    | **(06/30/09)**    | **(01/01/09-06/30/09)** |
| **Davis Appreciation & Income Fund**      |              |              |                    |
| **Class A**(annualized expense ratio 1.19%**) |              |              |                    |
| Actual                                        | $1,000.00         | $1,189.89         | $6.46                   |
| Hypothetical                                  | $1,000.00         | $1,018.89         | $5.96                   |
| **Class B**(annualized expense ratio 2.15%**) |              |              |                    |
| Actual                                        | $1,000.00         | $1,184.78         | $11.65                  |
| Hypothetical                                  | $1,000.00         | $1,014.13         | $10.74                  |
| **Class C**(annualized expense ratio 2.03%**) |              |              |                    |
| Actual                                        | $1,000.00         | $1,184.71         | $11.00                  |
| Hypothetical                                  | $1,000.00         | $1,014.73         | $10.14                  |
| **Class Y**(annualized expense ratio 0.92%**) |              |              |                    |
| Actual                                        | $1,000.00         | $1,191.83         | $5.00                   |
| Hypothetical                                  | $1,000.00         | $1,020.23         | $4.61                   |
|                                          |              |              |                    |
| **Davis Real Estate Fund**                    |              |              |                    |
| **Class A**(annualized expense ratio 1.54%**) |              |              |                    |
| Actual                                        | $1,000.00         | $935.64           | $7.39                   |
| Hypothetical                                  | $1,000.00         | $1,017.16         | $7.70                   |
| **Class B**(annualized expense ratio 2.71%**) |              |              |                    |
| Actual                                        | $1,000.00         | $930.77           | $12.97                  |
| Hypothetical                                  | $1,000.00         | $1,011.36         | $13.51                  |
| **Class C**(annualized expense ratio 2.40%**) |              |              |                    |
| Actual                                        | $1,000.00         | $932.42           | $11.50                  |
| Hypothetical                                  | $1,000.00         | $1,012.89         | $11.98                  |
| **Class Y**(annualized expense ratio 1.14%**) |              |              |                    |
| Actual                                        | $1,000.00         | $938.19           | $5.48                   |
| Hypothetical                                  | $1,000.00         | $1,019.14         | $5.71                   |
|                                               |                   |                   |                         |  |

 

Hypothetical assumes 5% annual return before expenses.

*Expenses are equal to each Class’s annualized operating expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). See page 18 for a description of the “Expense Example”. 

**The expense ratios reflect the impact, if any, of the reduction of expenses paid indirectly and of certain reimbursements from the Adviser. 

 

17

 

----

**DAVIS SERIES,            INC.**                                                                                            **Expense Example*****(Unaudited) –*****(Continued)**

 

**The following disclosure provides important information regarding each Fund’s Expense Example. Please refer to this information when reviewing the Expense Example for each Class.**

 

**Example**

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchases and contingent deferred sales charges on redemptions; and (2) ongoing costs, including advisory and administrative fees, distribution and/or service (12b-1) fees, and other Fund expenses. The Expense Example is intended to help you understand your ongoing costs (in dollars)            of investing in each Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period indicated, which for each class is for the six-month period ended June 30, 2009. 

 

**Actual Expenses**

 

The information represented in the row entitled “Actual” provides information about actual account values and actual expenses. You may use the information in this row, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the            result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same Social Security Number if the accounts total at least $50,000 at Davis Funds. If this fee was included, the estimate of expenses you paid during            the period would be higher, and your ending account value lower, by this amount. 

 

**Hypothetical Example for Comparison Purposes**

 

The information represented in the row entitled “Hypothetical” provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending            account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. An annual maintenance fee of $15, charged on retirement plan accounts per Social Security Number, is not included in the Expense Example. This fee will be waived for accounts sharing the same            Social Security Number if the accounts total at least $50,000 at Davis Funds. If this fee was included, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. 

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front end or contingent deferred sales charges (loads). Therefore, the information in the row entitled “Hypothetical” is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.            In addition, if these transactional costs were included, your costs would have been higher.

 

18

 

----

**DAVIS SERIES,            INC.**                                                                                                                                **Schedule of Investments**

| **DAVIS OPPORTUNITY FUND** | **June 30, 2009*****(Unaudited)*** |
|----------------------------|------------------------------------|

 

| **Shares**                      |                                                | **Security**                                    |   | **Value****(Note 1)** |       |
|---------------------------------|-----------------------------------------------------|-------------------------------------------------|--------|-----------------------|------------|
| **COMMONSTOCK– (96.31%)** |                                                |
|                            | **CONSUMER DISCRETIONARY – (19.36%)**         |                                            |
|                            | **Automobiles & Components – (0.16%)**    |                                            |
|                            | 34,240                                              | Johnson Controls, Inc.                          |   | $                     | 743,693    |   |
|                                 |
|                            | **Consumer Durables & Apparel – (4.25%)** |                                            |
|                            | 279,380                                             | Garmin Ltd.                                     |   |                  | 6,653,434  |   |
|                            | 316,329                                             | Hunter Douglas NV (Netherlands)                 |   |                  | 12,913,471 |   |
|                                 |
|                            |                                                     | 19,566,905                                      |   |
|                                 |
|                            | **Consumer Services – (3.45%)**               |                                            |
|                            | 173,830                                             | H&R Block, Inc.                             |   |                  | 2,995,091  |   |
|                            | 387,750                                             | Yum! Brands, Inc.                               |   |                  | 12,927,585 |   |
|                                 |
|                            |                                                     | 15,922,676                                      |   |
|                                 |
|                            | **Media – (11.31%)**                          |                                            |
|                            | 1,073,800                                           | Comcast Corp., Special Class A                  |   |                  | 15,124,473 |   |
|                            | 579,290                                             | Grupo Televisa S.A., ADR (Mexico)               |   |                  | 9,847,930  |   |
|                            | 275,416                                             | Lagardere S.C.A. (France)                       |   |                  | 9,145,310  |   |
|                            | 43,280                                              | Liberty Media Corp. - Entertainment, Series A * |   |                  | 1,156,225  |   |
|                            | 129,800                                             | News Corp., Class A                             |   |                  | 1,183,127  |   |
|                            | 671,800                                             | Walt Disney Co.                                 |   |                  | 15,673,094 |   |
|                                 |
|                            |                                                     | 52,130,159                                      |   |
|                                 |
|                            | **Retailing – (0.19%)**                       |                                            |
|                            | 37,080                                              | CarMax, Inc. *                                  |   |                  | 545,076    |   |
|                            | 68,540                                              | Liberty Media Corp. - Interactive, Series A *   |   |                  | 343,728    |   |
|                                 |
|                            |                                                     | 888,804                                         |   |
|                                 |
|                            | **TOTALCONSUMERDISCRETIONARY**                      |                                            |   | **89,252,237**        |       |
|                                 |
|                            | **CONSUMER STAPLES – (0.99%)**                |                                            |
|                            | **Food & Staples Retailing – (0.04%)**    |                                            |
|                            | 3,990                                               | Costco Wholesale Corp.                          |   |                  | 182,343    |   |
|                                 |
|                            | **Food, Beverage & Tobacco – (0.95%)**    |                                            |
|                            | 137,875                                             | Heineken Holding NV (Netherlands)               |   |                  | 4,378,980  |   |
|                                 |
|                            | **TOTALCONSUMERSTAPLES**                            |                                            |   | **4,561,323**         |       |
|                                 |
|                            | **ENERGY – (7.05%)**                          |                                            |
|                            | 85,800                                              | Devon Energy Corp.                              |   |                  | 4,676,100  |   |
|                            | 111,800                                             | Occidental Petroleum Corp.                      |   |                  | 7,357,558  |   |
|                            | 224,110                                             | Tenaris S.A., ADR (Argentina)                   |   |                  | 6,059,934  |   |
|                            | 194,159                                             | Transocean Ltd. *                               |   |                  | 14,424,072 |   |
|                                 |
|                            | **TOTALENERGY**                                     |                                            |   | **32,517,664**        |       |
|                                 |
|                            | **FINANCIALS – (14.29%)**                     |                                            |
|                            | **Banks – (1.11%)**                           |                                            |
|                            | **Commercial Banks – (1.11%)**                |                                            |
|                            | 211,030                                             | Wells Fargo & Co.                           |   |                  | 5,119,588  |   |
|                                 |
|                            | **Diversified Financials – (8.75%)**          |                                            |
|                            | **Capital Markets – (3.96%)**                 |                                            |
|                            | 386,640                                             | Bank of New York Mellon Corp.                   |   |                  | 11,332,418 |   |
|                            | 370,830                                             | Charles Schwab Corp.                            |   |                  | 6,502,504  |   |
|                            | 163,945                                             | E*TRADE Financial Corp. *                       |   |                  | 209,850    |   |
|                            | 5,582                                               | Julius Baer Holding AG (Switzerland)            |   |                  | 216,694    |   |
|                                 |
|                            | 18,261,466                                          |                                            |
|                                 |
|                            |
|                                 |                                                     |                                                 |        |                       |            |  |  |  |  |  |  |  |  |  |

 

 

19

 

----

**DAVIS SERIES,            INC.**                                                                                                                                **Schedule of Investments**

| **DAVIS OPPORTUNITY FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Shares**                           |                                                                    | **Security**                                       |   | **Value****(Note 1)** |       |
|--------------------------------------|-------------------------------------------------------------------------|----------------------------------------------------|--------|-----------------------|------------|
| **COMMON STOCK – (CONTINUED)** |                                                                    |
|                                 | **FINANCIALS – (CONTINUED)**                                      |                                               |
|                                 | **Diversified Financials – (Continued)**                          |                                               |
|                                 | **Diversified Financial Services – (4.79%)**                      |                                               |
|                                 | 1,181                                                                   | CME Group Inc.                                     |   | $                     | 367,450    |   |
|                                 | 691,250                                                                 | Oaktree Capital Group LLC, Class A (a)             |   |                  | 14,861,875 |   |
|                                 | 110,235                                                                 | Pargesa Holdings S.A., Bearer Shares (Switzerland) |   |                  | 6,878,591  |   |
|                                      |
|                                 | 22,107,916                                                              |                                               |
|                                      |
|                                 |                                                                         | 40,369,382                                         |   |
|                                      |
|                                 | **Insurance – (4.43%)**                                           |                                               |
|                                 | **Insurance Brokers – (0.13%)**                                   |                                               |
|                                 | 31,066                                                                  | Brown & Brown, Inc.                            |   |                  | 619,146    |   |
|                                      |
|                                 | **Life & Health Insurance – (0.26%)**                         |                                               |
|                                 | 51,100                                                                  | Power Corp. of Canada (Canada)                     |   |                  | 1,179,146  |   |
|                                      |
|                                 | **Property & Casualty Insurance – (2.83%)**                   |                                               |
|                                 | 1,794                                                                   | Berkshire Hathaway Inc., Class B *                 |   |                  | 5,194,939  |   |
|                                 | 27,424                                                                  | Markel Corp. *                                     |   |                  | 7,725,341  |   |
|                                 | 25,345                                                                  | MBIA Inc. *                                        |   |                  | 109,744    |   |
|                                      |
|                                 | 13,030,024                                                              |                                               |
|                                      |
|                                 | **Reinsurance – (1.21%)**                                         |                                               |
|                                 | 1,830                                                                   | Everest Re Group, Ltd.                             |   |                  | 130,973    |   |
|                                 | 17,210                                                                  | RenaissanceRe Holdings Ltd.                        |   |                  | 800,954    |   |
|                                 | 107,395                                                                 | Transatlantic Holdings, Inc.                       |   |                  | 4,653,425  |   |
|                                      |
|                                 | 5,585,352                                                               |                                               |
|                                      |
|                                 |                                                                         | 20,413,668                                         |   |
|                                      |
|                                 | **TOTALFINANCIALS**                                                     |                                               |   | **65,902,638**        |       |
|                                      |
|                                 | **HEALTH CARE – (18.11%)**                                        |                                               |
|                                 | **Health Care Equipment & Services – (5.09%)**                |                                               |
|                                 | 156,050                                                                 | Becton, Dickinson and Co.                          |   |                  | 11,127,925 |   |
|                                 | 14,295                                                                  | Cardinal Health, Inc.                              |   |                  | 436,712    |   |
|                                 | 194,150                                                                 | IDEXX Laboratories, Inc. *                         |   |                  | 8,963,906  |   |
|                                 | 10,500                                                                  | Laboratory Corp. of America Holdings *             |   |                  | 711,795    |   |
|                                 | 89,640                                                                  | UnitedHealth Group Inc.                            |   |                  | 2,239,207  |   |
|                                      |
|                                 |                                                                         | 23,479,545                                         |   |
|                                      |
|                                 | **Pharmaceuticals, Biotechnology & Life Sciences – (13.02%)** |                                               |
|                                 | 422,660                                                                 | Johnson & Johnson                              |   |                  | 24,007,088 |   |
|                                 | 124,700                                                                 | Merck & Co., Inc.                              |   |                  | 3,486,612  |   |
|                                 | 266,900                                                                 | Pfizer Inc.                                        |   |                  | 4,003,500  |   |
|                                 | 1,136,200                                                               | Schering-Plough Corp.                              |   |                  | 28,541,344 |   |
|                                      |
|                                 |                                                                         | 60,038,544                                         |   |
|                                      |
|                                 | **TOTALHEALTHCARE**                                                     |                                               |   | **83,518,089**        |       |
|                                      |
|                                 | **INDUSTRIALS – (8.37%)**                                         |                                               |
|                                 | **Capital Goods – (5.11%)**                                       |                                               |
|                                 | 207,840                                                                 | ABB Ltd., ADR (Switzerland)                        |   |                  | 3,279,715  |   |
|                                 | 1,360,568                                                               | Blount International, Inc. *                       |   |                  | 11,714,491 |   |
|                                 | 262,570                                                                 | Shaw Group Inc. *                                  |   |                  | 7,197,044  |   |
|                                 | 19,970                                                                  | Siemens AG, Registered (Germany)                   |   |                  | 1,377,212  |   |
|                                      |
|                                 |                                                                         | 23,568,462                                         |   |
|                                      |
|                                 | **Commercial & Professional Services – (1.73%)**              |                                               |
|                                 | 1,570                                                                   | D&B Corp.                                      |   |                  | 127,499    |   |
|                                      |                                                                         |                                                    |        |                       |            |  |  |  |  |  |  |  |  |  |

 

 

20

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS OPPORTUNITY FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Shares/Principal**                 |                                                             | **Security**                                                    |   | **Value****(Note 1)** |       |
|--------------------------------------|------------------------------------------------------------------|-----------------------------------------------------------------|--------|-----------------------|------------|
| **COMMON STOCK – (CONTINUED)** |                                                             |
|                                 | **INDUSTRIALS – (CONTINUED)**                              |                                                            |
|                                 | **Commercial & Professional Services – (Continued)**   |                                                            |
|                                 | 272,720                                                          | Iron Mountain Inc. *                                            |   | $                     | 7,840,700  |   |
|                                      |
|                                 |                                                                  | 7,968,199                                                       |   |
|                                      |
|                                 | **Transportation – (1.53%)**                               |                                                            |
|                                 | 958,000                                                          | Clark Holdings, Inc. *(b)                                       |   |                  | 718,500    |   |
|                                 | 80,920                                                           | Kuehne & Nagel International AG, Registered (Switzerland)   |   |                  | 6,337,759  |   |
|                                      |
|                                 |                                                                  | 7,056,259                                                       |   |
|                                      |
|                                 | **TOTALINDUSTRIALS**                                             |                                                            |   | **38,592,920**        |       |
|                                      |
|                                 | **INFORMATION TECHNOLOGY – (21.57%)**                      |                                                            |
|                                 | **Semiconductors & Semiconductor Equipment – (3.54%)** |                                                            |
|                                 | 766,020                                                          | Texas Instruments Inc.                                          |   |                  | 16,316,226 |   |
|                                      |
|                                 | **Software & Services – (13.06%)**                     |                                                            |
|                                 | 666,400                                                          | Activision Blizzard, Inc. *                                     |   |                  | 8,419,964  |   |
|                                 | 66,609                                                           | Google Inc., Class A *                                          |   |                  | 28,097,674 |   |
|                                 | 725,730                                                          | Microsoft Corp.                                                 |   |                  | 17,265,117 |   |
|                                 | 160,710                                                          | SAP AG, ADR (Germany)                                           |   |                  | 6,458,935  |   |
|                                      |
|                                 |                                                                  | 60,241,690                                                      |   |
|                                      |
|                                 | **Technology Hardware & Equipment – (4.97%)**          |                                                            |
|                                 | 535,060                                                          | Agilent Technologies, Inc. *                                    |   |                  | 10,867,069 |   |
|                                 | 290,580                                                          | Cisco Systems, Inc. *                                           |   |                  | 5,417,864  |   |
|                                 | 146,600                                                          | Harris Corp.                                                    |   |                  | 4,157,576  |   |
|                                 | 63,600                                                           | Hewlett-Packard Co.                                             |   |                  | 2,458,140  |   |
|                                      |
|                                 |                                                                  | 22,900,649                                                      |   |
|                                      |
|                                 | **TOTALINFORMATIONTECHNOLOGY**                                   |                                                            |   | **99,458,565**        |       |
|                                      |
|                                 | **MATERIALS – (5.94%)**                                    |                                                            |
|                                 | 59,000                                                           | Monsanto Co.                                                    |   |                  | 4,386,060  |   |
|                                 | 256,910                                                          | Sigma-Aldrich Corp.                                             |   |                  | 12,735,029 |   |
|                                 | 961,400                                                          | Sino-Forest Corp. (Canada)*                                     |   |                  | 10,249,202 |   |
|                                      |
|                                 | **TOTALMATERIALS**                                               |                                                            |   | **27,370,291**        |       |
|                                      |
|                                 | **TELECOMMUNICATION SERVICES – (0.19%)**                   |                                                            |
|                                 | 26,990                                                           | American Tower Corp., Class A *                                 |   |                  | 850,995    |   |
|                                      |
|                                 | **TOTALTELECOMMUNICATIONSERVICES**                               |                                                            |   | **850,995**           |       |
|                                      |
|                                 | **UTILITIES – (0.44%)**                                    |                                                            |
|                                 | 78,610                                                           | NRG Energy, Inc. *                                              |   |                  | 2,040,716  |   |
|                                      |
|                                 | **TOTALUTILITIES**                                               |                                                            |   | **2,040,716**         |       |
|                                      |
|                                 | **TOTAL COMMON STOCK – (Identified cost $476,538,460)**    |                                                            |   | **444,065,438**       |       |
|                                      |
| **CONVERTIBLEBONDS– (1.17%)**  |                                                             |
|                                 | **TELECOMMUNICATION SERVICES – (1.17%)**                   |                                                            |
| $                                    | 5,600,000                                                        | Level 3 Communications, Inc., Conv. Sr. Notes, 10.00%, 05/01/11 |   |                  | 5,397,000  |   |
|                                      |
|                                 | **TOTAL CONVERTIBLE BONDS – (Identified cost $5,600,000)** |                                                            |   | **5,397,000**         |       |
|                                      |
|                                      |                                                                  |                                                                 |        |                       |            |  |  |  |  |  |  |  |  |

 

 

21

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS OPPORTUNITY FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Principal**                           |                                                                                                                                                          | **Security**                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | **Value****(Note 1)** |                     |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|--------------------------|
| **SHORTTERMINVESTMENTS– (2.52%)** |                                                                                                                                                          |
| $                                       | 3,581,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                    | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $3,581,007                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $3,652,620)               |                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 3,581,000             |                     |
|                                    | 2,295,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                    | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $2,295,002                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $2,340,900)                |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 2,295,000             |                     |
|                                    | 5,737,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                    | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $5,737,018                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $5,851,740) |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 5,737,000             |                     |
|                                         |
|                                    | **TOTAL SHORT TERM INVESTMENTS – (Identified cost $11,613,000)**                                                                                        |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | **11,613,000**        |                     |
|                                         |
|                                    | Total Investments – (100.00%) – (Identified cost $493,751,460) – (c)                                                                        |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 461,075,438           |                     |
|                                    | Liabilities Less Other Assets – (0.00%)                                                                                                                 |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (15,467)              |                     |
|                                         |
|                                    | Net Assets – (100.00%)                                                                                                                                  |                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 461,059,971           |                     |
|                                         |
|                                         |
|                                    | ADR: American Depositary Receipt                                                                                                                              |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                    | *                                                                                                                                                             |                                                       | Non-Income producing security.                                                                                                                                                                                                                                                                                                                                                                                                                                      |                  |                     |
|                                    | (a)                                                                                                                                                           |                                                       | Illiquid Security – See Note 8 of the Notes to Financial Statements.                                                                                                                                                                                                                                                                                                                                                                                          |                  |                     |
|                                    | (b)                                                                                                                                                           |                                                       | Affiliated Company. Represents ownership of at least 5% of the voting securities of the issuer and is an affiliate, as defined in the Investment Company Act of 1940, at or during the six months ended June 30, 2009. The aggregate fair value of the securities of affiliated companies held by the Fund as of June 30, 2009, amounts to $718,500. Transactions during the period in which the                            issuers were affiliates are as follows: |                  |                     |
|                                    |  

 

Security                                                                                                                                      |                                                       | Shares 

December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                          |                  |  

Gross

Additions |   |  

Gross

Reductions |   | Shares

June 30, 2009 |   | Dividend

Income |   |
|                                    | Clark Holdings, Inc.                                                                                                                                          |                                                       | 958,000                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                  | –                  |   | – |   | 958,000 | $ | –

 

  |   |
|                                    |  

(c)                                                                                                                                                   |                                                       |  

Aggregate cost for federal income tax purposes is $498,959,231. At June 30, 2009 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows:                                                                                                                                                                                                                                                                        |                  |                     |
|                                    | Unrealized appreciation                                                                                                                                       |                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 46,112,378            |                     |
|                                    | Unrealized depreciation                                                                                                                                       |                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (83,996,171)          |                     |
|                                         |
|                                    | Net unrealized depreciation                                                                                                                                   |                                                       | $                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (37,883,793)          |                     |
|                                         |
|                                         |
| ***See Notes to Financial Statements*** |                                                                                                                                                          |
|                                         |                                                                                                                                                               |                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                       |                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

22

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT BOND FUND** | **June 30, 2009*****(Unaudited)*** |
|--------------------------------|------------------------------------|

 

| **Principal**                            |                                                                    | **Security**                                     |   | **Value****(Note 1)** |      |
|------------------------------------------|-------------------------------------------------------------------------|--------------------------------------------------|--------|-----------------------|-----------|
| **GOVERNMENTAGENCYNOTES– (8.70%)** |                                                                    |
| $                                        | 125,000                                                                 | Fannie Mae, 6.50%, 07/15/09                      |   | $                     | 125,308   |   |
|                                     | 500,000                                                                 | Fannie Mae, 4.00%, 11/09/09                      |   |                  | 506,626   |   |
|                                     | 500,000                                                                 | Fannie Mae, 5.00%, 07/28/10                      |   |                  | 523,668   |   |
|                                     | 3,000,000                                                               | Fannie Mae, 4.00%, 08/18/11                      |   |                  | 3,015,427 |   |
|                                     | 400,000                                                                 | Fannie Mae, 4.00%, 01/28/13                      |   |                  | 423,998   |   |
|                                     | 500,000                                                                 | Federal Farm Credit Bank, 4.125%, 07/17/09       |   |                  | 500,891   |   |
|                                     | 340,000                                                                 | Federal Farm Credit Bank, 4.50%, 10/04/10        |   |                  | 355,600   |   |
|                                     | 600,000                                                                 | Federal Home Loan Bank, 5.00%, 11/03/09          |   |                  | 609,610   |   |
|                                     | 1,000,000                                                               | Federal Home Loan Bank, 4.875%, 03/12/10         |   |                  | 1,030,772 |   |
|                                     | 185,000                                                                 | Federal Home Loan Bank, 4.75%, 08/13/10          |   |                  | 193,251   |   |
|                                     | 934,109                                                                 | Federal Home Loan Bank, 5.30%, 06/15/12          |   |                  | 975,718   |   |
|                                     | 2,000,000                                                               | Federal Home Loan Bank, 4.95%, 07/09/12          |   |                  | 2,005,527 |   |
|                                     | 847,352                                                                 | Final Maturity Amortizing Notes, 4.10%, 01/25/10 |   |                  | 856,093   |   |
|                                     | 2,316,957                                                               | Final Maturity Amortizing Notes, 4.62%, 04/25/10 |   |                  | 2,360,187 |   |
|                                     | 643,695                                                                 | Final Maturity Amortizing Notes, 4.10%, 11/25/10 |   |                  | 659,352   |   |
|                                     | 200,000                                                                 | Freddie Mac, 4.00%, 09/22/09                     |   |                  | 201,714   |   |
|                                     | 200,000                                                                 | Freddie Mac, 5.00%, 10/18/10                     |   |                  | 210,771   |   |
|                                          |
|                                     | **TOTAL GOVERNMENT AGENCY NOTES – (Identified cost $14,359,518)** |                                             |   | **14,554,513**        |      |
|                                          |
| **MORTGAGES– (84.79%)**            |                                                                    |
|                                     | **COLLATERALIZED MORTGAGE OBLIGATIONS – (46.42%)**                |                                             |
|                                     | 535,000                                                                 | Fannie Mae, 4.50%, 01/25/14                      |   |                  | 547,077   |   |
|                                     | 51,435                                                                  | Fannie Mae, 5.00%, 07/25/15                      |   |                  | 52,156    |   |
|                                     | 1,247,977                                                               | Fannie Mae, 3.50%, 09/25/16                      |   |                  | 1,279,054 |   |
|                                     | 1,491,523                                                               | Fannie Mae, 5.00%, 02/25/17                      |   |                  | 1,545,456 |   |
|                                     | 3,893,961                                                               | Fannie Mae, 4.50%, 04/25/17                      |   |                  | 3,987,621 |   |
|                                     | 1,940,408                                                               | Fannie Mae, 4.00%, 10/25/17                      |   |                  | 1,983,470 |   |
|                                     | 2,868,669                                                               | Fannie Mae, 5.00%, 12/25/17                      |   |                  | 2,972,378 |   |
|                                     | 1,265,000                                                               | Fannie Mae, 4.00%, 01/25/19                      |   |                  | 1,299,848 |   |
|                                     | 6,757,628                                                               | Fannie Mae, 4.00%, 12/25/20                      |   |                  | 6,904,641 |   |
|                                     | 1,211,936                                                               | Fannie Mae, 4.50%, 07/25/21                      |   |                  | 1,237,105 |   |
|                                     | 2,741,872                                                               | Fannie Mae, 4.00%, 11/25/22                      |   |                  | 2,786,407 |   |
|                                     | 3,928,440                                                               | Fannie Mae, 4.25%, 12/25/22                      |   |                  | 3,985,681 |   |
|                                     | 320,448                                                                 | Fannie Mae, 5.00%, 08/25/23                      |   |                  | 321,803   |   |
|                                     | 1,341,290                                                               | Fannie Mae, 5.50%, 11/25/23                      |   |                  | 1,395,240 |   |
|                                     | 293,844                                                                 | Fannie Mae, 8.00%, 12/17/24                      |   |                  | 299,909   |   |
|                                     | 396,987                                                                 | Fannie Mae, 5.00%, 02/25/25                      |   |                  | 404,403   |   |
|                                     | 602,347                                                                 | Fannie Mae, 5.50%, 11/25/25                      |   |                  | 612,435   |   |
|                                     | 584,322                                                                 | Fannie Mae, 5.50%, 03/25/28                      |   |                  | 605,420   |   |
|                                     | 596,179                                                                 | Freddie Mac, 4.00%, 09/15/10                     |   |                  | 609,625   |   |
|                                     | 337,355                                                                 | Freddie Mac, 4.50%, 02/15/15                     |   |                  | 343,725   |   |
|                                     | 3,417,500                                                               | Freddie Mac, 4.00%, 10/15/15                     |   |                  | 3,511,092 |   |
|                                     | 1,313,884                                                               | Freddie Mac, 5.00%, 08/15/16                     |   |                  | 1,352,214 |   |
|                                     | 600,000                                                                 | Freddie Mac, 4.00%, 01/15/17                     |   |                  | 617,878   |   |
|                                     | 1,630,714                                                               | Freddie Mac, 5.00%, 01/15/18                     |   |                  | 1,697,351 |   |
|                                     | 862,664                                                                 | Freddie Mac, 4.50%, 09/15/18                     |   |                  | 879,795   |   |
|                                     | 3,350,191                                                               | Freddie Mac, 5.00%, 12/15/22                     |   |                  | 3,404,812 |   |
|                                     | 4,647,016                                                               | Freddie Mac, 4.00%, 08/15/23                     |   |                  | 4,698,356 |   |
|                                     | 305,111                                                                 | Freddie Mac, 5.00%, 06/15/25                     |   |                  | 313,455   |   |
|                                          |                                                                         |                                                  |        |                       |           |  |  |  |  |  |

 

 

23

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT BOND FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|----------------------------------------------|------------------------------------|

 

| **Principal**                     |                                                        | **Security**                          |   | **Value****(Note 1)** |      |
|-----------------------------------|-------------------------------------------------------------|---------------------------------------|--------|-----------------------|-----------|
| **MORTGAGES – (CONTINUED)** |                                                        |
|                              | **COLLATERALIZED MORTGAGE OBLIGATIONS – (CONTINUED)** |                                  |
| $                                 | 1,734,031                                                   | Freddie Mac, 5.50%, 10/15/25          |   | $                     | 1,772,215 |   |
|                              | 1,983,076                                                   | Freddie Mac, 5.50%, 02/15/26          |   |                  | 2,002,376 |   |
|                              | 300,000                                                     | Freddie Mac, 5.00%, 05/15/27          |   |                  | 311,263   |   |
|                              | 1,654,116                                                   | Freddie Mac, 5.00%, 05/15/27          |   |                  | 1,708,304 |   |
|                              | 1,665,294                                                   | Freddie Mac, 5.00%, 10/15/27          |   |                  | 1,716,672 |   |
|                              | 500,000                                                     | Freddie Mac, 5.50%, 12/15/27          |   |                  | 504,698   |   |
|                              | 2,011,632                                                   | Freddie Mac, 5.50%, 12/15/27          |   |                  | 2,052,900 |   |
|                              | 237,916                                                     | Freddie Mac, 6.00%, 03/15/30          |   |                  | 245,228   |   |
|                              | 1,310,332                                                   | Freddie Mac, 5.50%, 01/15/31          |   |                  | 1,345,919 |   |
|                              | 1,484,059                                                   | Freddie Mac, 4.25%, 06/15/33          |   |                  | 1,506,754 |   |
|                              | 420,373                                                     | Ginnie Mae, 6.00%, 05/16/30           |   |                  | 421,770   |   |
|                              | 4,978,740                                                   | Ginnie Mae, 4.00%, 11/20/30           |   |                  | 5,069,436 |   |
|                              | 4,926,012                                                   | Ginnie Mae, 5.00%, 02/16/32           |   |                  | 5,068,177 |   |
|                              | 4,182,175                                                   | Ginnie Mae, 5.00%, 08/20/32           |   |                  | 4,295,964 |   |
|                                   |
|                              | **TOTALCOLLATERALIZEDMORTGAGEOBLIGATIONS**                  |                                  |   | **77,670,083**        |      |
|                                   |
|                              | **FANNIE MAE POOLS – (16.92%)**                       |                                  |
|                              | 106,765                                                     | 5.50%, 09/01/09, Pool No. 254469      |   |                  | 106,943   |   |
|                              | 1,553,685                                                   | 4.50%, 11/01/09, Pool No. 254566      |   |                  | 1,561,669 |   |
|                              | 251,915                                                     | 4.00%, 08/01/10, Pool No. 254861      |   |                  | 254,075   |   |
|                              | 549,314                                                     | 4.00%, 09/01/10, Pool No. 254901      |   |                  | 555,611   |   |
|                              | 1,842,857                                                   | 3.50%, 04/01/11, Pool No. 255245      |   |                  | 1,851,927 |   |
|                              | 414,772                                                     | 4.50%, 01/01/13, Pool No. 254646      |   |                  | 423,025   |   |
|                              | 1,211,711                                                   | 4.563%, 01/01/15, Pool No. 725788     |   |                  | 1,253,002 |   |
|                              | 3,010,730                                                   | 6.00%, 09/01/17, Pool No. 665776      |   |                  | 3,208,779 |   |
|                              | 1,493,459                                                   | 5.00%, 03/01/18, Pool No. 357369      |   |                  | 1,557,553 |   |
|                              | 2,302,184                                                   | 4.50%, 08/01/18, Pool No. 254833      |   |                  | 2,371,729 |   |
|                              | 2,340,580                                                   | 5.00%, 12/01/18, Pool No. 257504      |   |                  | 2,433,715 |   |
|                              | 1,635,200                                                   | 4.00%, 01/01/19, Pool No. 976841      |   |                  | 1,652,404 |   |
|                              | 4,876,994                                                   | 4.00%, 04/01/19, Pool No. MA0045      |   |                  | 4,929,828 |   |
|                              | 170,895                                                     | 6.50%, 07/01/32, Pool No. 635069      |   |                  | 184,282   |   |
|                              | 1,883,637                                                   | 4.664%, 10/01/32, Pool No. 648917 (a) |   |                  | 1,897,432 |   |
|                              | 1,007,297                                                   | 4.808%, 05/01/35, Pool No. 826242 (a) |   |                  | 1,036,635 |   |
|                              | 1,424,734                                                   | 5.066%, 01/01/36, Pool No. 848973 (a) |   |                  | 1,476,630 |   |
|                              | 274,933                                                     | 3.803%, 03/01/36, Pool No. 843396 (a) |   |                  | 273,367   |   |
|                              | 1,238,282                                                   | 5.614%, 04/01/36, Pool No. 851605 (a) |   |                  | 1,287,077 |   |
|                                   |
|                              | **TOTALFANNIEMAEPOOLS**                                     |                                  |   | **28,315,683**        |      |
|                                   |
|                              | **FREDDIE MAC POOLS – (20.27%)**                      |                                  |
|                              | 517,244                                                     | 4.50%, 07/01/09, Pool No. M90934      |   |                  | 518,384   |   |
|                              | 310,134                                                     | 4.50%, 10/01/09, Pool No. M80778      |   |                  | 311,876   |   |
|                              | 912,203                                                     | 5.00%, 02/01/10, Pool No. M90972      |   |                  | 920,256   |   |
|                              | 3,796,944                                                   | 4.00%, 03/01/10, Pool No. M80806      |   |                  | 3,827,721 |   |
|                              | 583,319                                                     | 4.50%, 03/01/10, Pool No. M80807      |   |                  | 588,342   |   |
|                              | 4,443,912                                                   | 4.50%, 05/01/10, Pool No. M80818      |   |                  | 4,495,488 |   |
|                              | 688,072                                                     | 3.00%, 10/01/10, Pool No. M91001      |   |                  | 685,761   |   |
|                              | 2,575,913                                                   | 4.50%, 10/01/10, Pool No. M80856      |   |                  | 2,642,612 |   |
|                              | 650,607                                                     | 4.00%, 11/01/10, Pool No. M80864      |   |                  | 660,206   |   |
|                              | 2,511,727                                                   | 4.50%, 11/01/10, Pool No. M80865      |   |                  | 2,558,429 |   |
|                              | 945,267                                                     | 4.00%, 02/01/11, Pool No. M80897      |   |                  | 961,571   |   |
|                              | 1,929,908                                                   | 4.00%, 03/01/11, Pool No. M80903      |   |                  | 1,963,195 |   |
|                              | 761,975                                                     | 5.00%, 03/01/12, Pool No. M80963      |   |                  | 792,559   |   |
|                                   |                                                             |                                       |        |                       |           |  |  |  |  |  |  |

 

 

24

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT BOND FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|----------------------------------------------|------------------------------------|

 

| **Principal**                                           |                                                                                                                                                          | **Security**                                               |                                                                                                                                                                                 | **Value****(Note 1)** |      |
|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|-----------|
| **MORTGAGES – (CONTINUED)**                       |                                                                                                                                                          |
|                                                    | **FREDDIE MAC POOLS – (CONTINUED)**                                                                                                                     |                                                       |
| $                                                       | 845,330                                                                                                                                                       | 3.50%, 04/01/12, Pool No. M80974                           |                                                                                                                                                                                 | $                     | 854,719   |   |
|                                                    | 878,459                                                                                                                                                       | 4.00%, 12/01/12, Pool No. M81008                           |                                                                                                                                                                                 |                  | 900,833   |   |
|                                                    | 849,151                                                                                                                                                       | 4.50%, 03/01/15, Pool No. B18794                           |                                                                                                                                                                                 |                  | 870,990   |   |
|                                                    | 1,760,930                                                                                                                                                     | 5.50%, 12/01/18, Pool No. G11684                           |                                                                                                                                                                                 |                  | 1,851,177 |   |
|                                                    | 2,506,325                                                                                                                                                     | 5.00%, 05/01/21, Pool No. G13296                           |                                                                                                                                                                                 |                  | 2,603,706 |   |
|                                                    | 1,518,655                                                                                                                                                     | 5.50%, 06/01/22, Pool No. G12688                           |                                                                                                                                                                                 |                  | 1,588,892 |   |
|                                                    | 605,496                                                                                                                                                       | 4.367%, 12/01/34, Pool No. 1H1238 (a)                      |                                                                                                                                                                                 |                  | 623,116   |   |
|                                                    | 3,603,916                                                                                                                                                     | 4.742%, 04/01/35, Pool No. 782528 (a)                      |                                                                                                                                                                                 |                  | 3,704,123 |   |
|                                                         |
|                                                    | **TOTALFREDDIEMACPOOLS**                                                                                                                                      |                                                       |                                                                                                                                                                                 | **33,923,956**        |      |
|                                                         |
|                                                    | **GINNIE MAE POOLS – (1.18%)**                                                                                                                          |                                                       |
|                                                    | 1,866,508                                                                                                                                                     | 6.50%, 09/15/13, Pool No. 780856                           |                                                                                                                                                                                 |                  | 1,966,930 |   |
|                                                         |
|                                                    | **TOTALGINNIEMAEPOOLS**                                                                                                                                       |                                                       |                                                                                                                                                                                 | **1,966,930**         |      |
|                                                         |
|                                                    | **TOTAL MORTGAGES – (Identified cost $140,383,396)**                                                                                                    |                                                       |                                                                                                                                                                                 | **141,876,652**       |      |
|                                                         |
| **PRIVATEEXPORTFUNDING– (0.66%)**                 |                                                                                                                                                          |
|                                                    | 1,000,000                                                                                                                                                     | 5.685%, 05/15/12                                           |                                                                                                                                                                                 |                  | 1,105,247 |   |
|                                                         |
|                                                    | **TOTAL PRIVATE EXPORT FUNDING – (Identified cost $1,092,504)**                                                                                         |                                                       |                                                                                                                                                                                 | **1,105,247**         |      |
|                                                         |
| **SHORTTERMINVESTMENTS– (5.71%)**                 |                                                                                                                                                          |
|                                                    | 2,945,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                                                                                                                                 |
|                                                    | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $2,945,006                                                                                               |                                                       |
|                                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $3,003,900)               |                                                       |                                                                                                                                                                                 | 2,945,000             |      |
|                                                    | 1,888,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                                                                                                                                 |
|                                                    | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $1,888,002                                                                                               |                                                       |
|                                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $1,925,760)                |                                                       |                                                                                                                                                                                 | 1,888,000             |      |
|                                                    | 4,720,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                                                                                                                                 |
|                                                    | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $4,720,014                                                                                               |                                                       |
|                                                    | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $4,814,400) |                                                       |                                                                                                                                                                                 | 4,720,000             |      |
|                                                         |
|                                                    | **TOTAL SHORT TERM INVESTMENTS – (Identified cost $9,553,000)**                                                                                         |                                                       |                                                                                                                                                                                 | **9,553,000**         |      |
|                                                         |
|                                                    | Total Investments – (99.86%) – (Identified cost $165,388,418) – (b)                                                                         |                                                       |                                                                                                                                                                                 | 167,089,412           |      |
|                                                    | Other Assets Less Liabilities – (0.14%)                                                                                                                 |                                                       |                                                                                                                                                                                 | 227,361               |      |
|                                                         |
|                                                    | Net Assets – (100.00%)                                                                                                                                  |                                                       | $                                                                                                                                                                                    | 167,316,773           |      |
|                                                         |
|                                                         |
|                                                    | (a)                                                                                                                                                           |                                                       | The interest rates on adjustable rate securities, shown as of June 30, 2009, may change daily or less frequently and are based on indices of market interest rates.                  |                  |      |
|                                                    | (b)                                                                                                                                                           |                                                       | Aggregate cost for federal income tax purposes is $165,388,418. At June 30, 2009 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows: |                  |      |
|                                                    | Unrealized appreciation                                                                                                                                       |                                                       | $                                                                                                                                                                                    | 1,968,084             |      |
|                                                    | Unrealized depreciation                                                                                                                                       |                                                       |                                                                                                                                                                                 | (267,090)             |      |
|                                                         |
|                                                    | Net unrealized appreciation                                                                                                                                   |                                                       | $                                                                                                                                                                                    | 1,700,994             |      |
|                                                         |
|                                                         |
| ***See Notes to Financial Statements***

 

  |                                                                                                                                                          |
|                                                         |                                                                                                                                                               |                                                            |                                                                                                                                                                                      |                       |           |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

25

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT MONEY MARKET FUND** | **June 30, 2009*****(Unaudited)*** |
|----------------------------------------|------------------------------------|

 

| **Principal**                            |                                                                        | **Security**          |   | **Value****(Note 1)** |       |
|------------------------------------------|-----------------------------------------------------------------------------|-----------------------|--------|-----------------------|------------|
| **FANNIEMAE– (10.78%)**            |                                                                        |
| $                                        | 10,000,000                                                                  | 0.9125%, 07/28/09 (a) |   | $                     | 10,003,707 |   |
|                                     | 500,000                                                                     | 0.60%, 08/19/09 (b)   |   |                  | 499,592    |   |
|                                     | 509,000                                                                     | 6.625%, 09/15/09      |   |                  | 513,731    |   |
|                                     | 500,000                                                                     | 4.01%, 10/21/09       |   |                  | 505,244    |   |
|                                     | 500,000                                                                     | 4.00%, 10/28/09       |   |                  | 505,296    |   |
|                                     | 2,655,000                                                                   | 0.31%, 11/05/09 (b)   |   |                  | 2,652,097  |   |
|                                     | 1,980,000                                                                   | 4.00%, 11/09/09       |   |                  | 2,004,776  |   |
|                                     | 2,600,000                                                                   | 0.38%, 12/01/09 (b)   |   |                  | 2,595,801  |   |
|                                     | 1,400,000                                                                   | 0.39%, 12/07/09 (b)   |   |                  | 1,397,589  |   |
|                                     | 4,676,000                                                                   | 4.625%, 12/15/09      |   |                  | 4,764,931  |   |
|                                     | 1,028,000                                                                   | 7.25%, 01/15/10       |   |                  | 1,065,847  |   |
|                                     | 1,274,000                                                                   | 4.30%, 01/19/10       |   |                  | 1,301,263  |   |
|                                     | 5,926,000                                                                   | 3.25%, 02/10/10       |   |                  | 6,027,518  |   |
|                                     | 1,000,000                                                                   | 4.40%, 03/08/10       |   |                  | 1,026,992  |   |
|                                     | 2,990,000                                                                   | 4.75%, 03/12/10       |   |                  | 3,079,302  |   |
|                                     | 1,000,000                                                                   | 4.75%, 04/20/10       |   |                  | 1,033,957  |   |
|                                          |
|                                     | **TOTAL FANNIE MAE – (Identified cost $38,977,643)**                  |                  |   | **38,977,643**        |       |
|                                          |
| **FEDERALFARMCREDITBANK– (3.54%)** |                                                                        |
|                                     | 500,000                                                                     | 4.125%, 07/17/09      |   |                  | 500,155    |   |
|                                     | 1,000,000                                                                   | 4.75%, 08/03/09       |   |                  | 1,001,750  |   |
|                                     | 4,500,000                                                                   | 0.2075%, 03/29/10 (a) |   |                  | 4,497,648  |   |
|                                     | 1,800,000                                                                   | 0.235%, 06/22/10 (a)  |   |                  | 1,799,105  |   |
|                                     | 5,000,000                                                                   | 0.205%, 06/24/10 (a)  |   |                  | 5,000,000  |   |
|                                          |
|                                     | **TOTAL FEDERAL FARM CREDIT BANK –****(Identified cost $12,798,658)** |                  |   | **12,798,658**        |       |
|                                          |
| **FEDERALHOMELOANBANK– (30.02%)**  |                                                                        |
|                                     | 2,360,000                                                                   | 5.375%, 07/17/09      |   |                  | 2,363,421  |   |
|                                     | 500,000                                                                     | 4.50%, 08/11/09       |   |                  | 502,035    |   |
|                                     | 500,000                                                                     | 5.25%, 09/11/09       |   |                  | 502,500    |   |
|                                     | 610,000                                                                     | 5.00%, 09/18/09       |   |                  | 615,595    |   |
|                                     | 8,500,000                                                                   | 2.25%, 10/02/09       |   |                  | 8,533,731  |   |
|                                     | 7,665,000                                                                   | 4.50%, 10/09/09       |   |                  | 7,746,414  |   |
|                                     | 11,600,000                                                                  | 1.0638%, 10/13/09 (a) |   |                  | 11,611,461 |   |
|                                     | 700,000                                                                     | 4.75%, 10/20/09       |   |                  | 708,841    |   |
|                                     | 500,000                                                                     | 3.17%, 10/27/09       |   |                  | 504,270    |   |
|                                     | 635,000                                                                     | 3.50%, 11/03/09       |   |                  | 641,358    |   |
|                                     | 1,000,000                                                                   | 5.00%, 11/03/09       |   |                  | 1,015,724  |   |
|                                     | 3,000,000                                                                   | 0.31%, 11/06/09 (b)   |   |                  | 2,996,693  |   |
|                                     | 5,000,000                                                                   | 0.80%, 11/13/09 (b)   |   |                  | 4,985,000  |   |
|                                     | 500,000                                                                     | 2.125%, 11/13/09      |   |                  | 502,891    |   |
|                                     | 4,500,000                                                                   | 4.00%, 11/13/09       |   |                  | 4,559,595  |   |
|                                     | 2,000,000                                                                   | 4.25%, 11/13/09       |   |                  | 2,028,255  |   |
|                                     | 5,000,000                                                                   | 0.83%, 11/18/09 (b)   |   |                  | 4,983,861  |   |
|                                     | 8,000,000                                                                   | 0.80%, 11/24/09       |   |                  | 8,000,000  |   |
|                                     | 1,000,000                                                                   | 4.27%, 11/24/09       |   |                  | 1,014,522  |   |
|                                     | 500,000                                                                     | 4.75%, 12/11/09       |   |                  | 509,033    |   |
|                                     | 4,600,000                                                                   | 5.00%, 12/11/09       |   |                  | 4,693,898  |   |
|                                     | 3,000,000                                                                   | 0.58%, 12/14/09       |   |                  | 3,002,606  |   |
|                                          |                                                                             |                       |        |                       |            |  |  |  |  |  |

 

 

26

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT MONEY MARKET FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------------------|------------------------------------|

 

| **Principal**                                  |                                                                    | **Security**                                          |   | **Value****(Note 1)** |       |
|------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------|--------|-----------------------|------------|
| **FEDERAL HOME LOAN BANK – (CONTINUED)** |                                                                    |
| $                                              | 700,000                                                                 | 0.57%, 12/21/09                                       |   | $                     | 700,368    |   |
|                                           | 2,950,000                                                               | 3.71%, 12/23/09                                       |   |                  | 2,995,722  |   |
|                                           | 2,030,000                                                               | 3.875%, 01/15/10                                      |   |                  | 2,067,496  |   |
|                                           | 17,000,000                                                              | 0.82%, 01/27/10 (a)                                   |   |                  | 17,026,021 |   |
|                                           | 1,400,000                                                               | 0.47%, 02/02/10 (b)                                   |   |                  | 1,396,052  |   |
|                                           | 8,000,000                                                               | 0.72%, 02/02/10 (a)                                   |   |                  | 8,000,000  |   |
|                                           | 2,000,000                                                               | 2.75%, 03/12/10                                       |   |                  | 2,031,770  |   |
|                                           | 350,000                                                                 | 4.25%, 06/11/10                                       |   |                  | 361,596    |   |
|                                           | 2,000,000                                                               | 0.999%, 07/09/10 (a)                                  |   |                  | 2,002,978  |   |
|                                                |
|                                           | **TOTAL FEDERAL HOME LOAN BANK – (Identified cost $108,603,707)** |                                                  |   | **108,603,707**       |       |
|                                                |
| **FREDDIEMAC– (10.77%)**                 |                                                                    |
|                                           | 1,000,000                                                               | 4.25%, 07/15/09                                       |   |                  | 1,001,082  |   |
|                                           | 6,325,000                                                               | 6.625%, 09/15/09                                      |   |                  | 6,401,992  |   |
|                                           | 4,000,000                                                               | 0.70%, 09/25/09 (b)                                   |   |                  | 3,993,311  |   |
|                                           | 6,000,000                                                               | 0.30%, 10/26/09 (b)                                   |   |                  | 5,994,150  |   |
|                                           | 2,500,000                                                               | 0.37%, 10/27/09 (b)                                   |   |                  | 2,496,968  |   |
|                                           | 14,650,000                                                              | 4.75%, 11/03/09                                       |   |                  | 14,869,149 |   |
|                                           | 2,500,000                                                               | 0.54%, 11/09/09 (b)                                   |   |                  | 2,495,087  |   |
|                                           | 700,000                                                                 | 4.125%, 11/30/09                                      |   |                  | 710,738    |   |
|                                           | 1,000,000                                                               | 0.39%, 12/07/09 (b)                                   |   |                  | 998,278    |   |
|                                                |
|                                           | **TOTAL FREDDIE MAC – (Identified cost $38,960,755)**             |                                                  |   | **38,960,755**        |       |
|                                                |
| **MORTGAGES– (6.63%)**                   |                                                                    |
|                                           | **FANNIE MAE POOLS – (3.29%)**                                    |                                                  |
|                                           | 11,640,202                                                              | 7.095%, 12/01/09, Pool No. 382142                     |   |                  | 11,640,203 |   |
|                                           | 270,347                                                                 | 4.50%, 03/01/10, Pool No. 254678                      |   |                  | 274,177    |   |
|                                                |
|                                           | **Total Fannie Mae Pools**                                              |                                                  |   | **11,914,380**        |       |
|                                                |
|                                           | **FREDDIE MAC POOLS – (3.34%)**                                   |                                                  |
|                                           | 1,700,649                                                               | 4.50%, 08/01/09, Pool No. M90941                      |   |                  | 1,704,412  |   |
|                                           | 499,121                                                                 | 5.00%, 09/01/09, Pool No. M80770                      |   |                  | 501,408    |   |
|                                           | 2,555,937                                                               | 4.50%, 10/01/09, Pool No. M80778                      |   |                  | 2,570,863  |   |
|                                           | 1,135,595                                                               | 5.00%, 11/01/09, Pool No. M80779                      |   |                  | 1,141,989  |   |
|                                           | 5,930,131                                                               | 4.50%, 01/01/10, Pool No. M80792                      |   |                  | 5,988,963  |   |
|                                           | 165,895                                                                 | 4.50%, 01/01/10, Pool No. M90967                      |   |                  | 167,776    |   |
|                                                |
|                                           | **Total Freddie Mac Pools**                                             |                                                  |   | **12,075,411**        |       |
|                                                |
|                                           | **TOTAL MORTGAGES – (Identified cost $23,989,791)**               |                                                  |   | **23,989,791**        |       |
|                                                |
| **OTHERAGENCIES– (4.58%)**               |                                                                    |
|                                           | 10,000,000                                                              | Government Loan Trust (Israel), 0.4086%, 10/01/09 (b) |   |                  | 9,989,778  |   |
|                                           | 3,000,000                                                               | AID-Israel 0.4625%, 11/01/09 (b)                      |   |                  | 2,995,372  |   |
|                                           | 3,600,000                                                               | FICO Strip 0.5827%, 12/06/09 (b)                      |   |                  | 3,590,984  |   |
|                                                |
|                                           | **TOTAL OTHER AGENCIES – (Identified cost $16,576,134)**          |                                                  |   | **16,576,134**        |       |
|                                                |
|                                                |                                                                         |                                                       |        |                       |            |  |  |  |  |  |  |

 

 

27

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS GOVERNMENT MONEY MARKET FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------------------|------------------------------------|

 

| **Principal**                            |                                                                                                                                                           | **Security**                                               |                                                                                                                                                                                                                                                                                                                                                          | **Value****(Note 1)** |   |
|------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|--------|
| **REPURCHASEAGREEMENTS– (26.36%)** |                                                                                                                                                           |
| $                                        | 29,396,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                                                                                                                                                                                                                                                                                                          |
|                                     | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $29,396,057                                                                                               |                                                       |
|                                     | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $29,983,920)               |                                                       | $                                                                                                                                                                                                                                                                                                                                                             | 29,396,000            |   |
|                                     | 18,840,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                                                                                                                                                                                                                                                                                                          |
|                                     | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $18,840,016                                                                                               |                                                       |
|                                     | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $19,216,800)                |                                                       |                                                                                                                                                                                                                                                                                                                                                          | 18,840,000            |   |
|                                     | 47,100,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                                                                                                                                                                                                                                                                                                          |
|                                     | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $47,100,144                                                                                               |                                                       |
|                                     | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $48,042,000) |                                                       |                                                                                                                                                                                                                                                                                                                                                          | 47,100,000            |   |
|                                          |
|                                     | **TOTAL REPURCHASE AGREEMENTS – (Identified cost $95,336,000)**                                                                                          |                                                       |                                                                                                                                                                                                                                                                                                                                                          | **95,336,000**        |   |
|                                          |
|                                     | Total Investments – (92.68%) – (Identified cost $335,242,688) – (c)                                                                          |                                                       |                                                                                                                                                                                                                                                                                                                                                          | 335,242,688           |   |
|                                     | Other Assets Less Liabilities – (7.32%)                                                                                                                  |                                                       |                                                                                                                                                                                                                                                                                                                                                          | 26,482,864            |   |
|                                          |
|                                     | Net Assets – (100.00%)                                                                                                                                   |                                                       | $                                                                                                                                                                                                                                                                                                                                                             | 361,725,552           |   |
|                                          |
|                                          |
|                                     | (a)                                                                                                                                                            |                                                       | The interest rates on floating rate securities, shown as of June 30, 2009, may change daily or less frequently and are based on indices of market interest rates. For purposes of amortized cost valuation, the maturity dates of these securities are considered to be the effective maturities, based on the reset dates of the securities' variable rates. |                  |   |
|                                     | (b)                                                                                                                                                            |                                                       | Zero coupon bonds reflect the effective yield on the date of purchase.                                                                                                                                                                                                                                                                                        |                  |   |
|                                     | (c)                                                                                                                                                            |                                                       | Aggregate cost for federal income tax purposes is $335,242,688.                                                                                                                                                                                                                                                                                               |                  |   |
| ***See Notes to Financial Statements***  |                                                                                                                                                           |
|                                          |                                                                                                                                                                |                                                            |                                                                                                                                                                                                                                                                                                                                                               |                       |        |  |  |  |  |  |  |  |  |  |  |  |

 

 

28

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS FINANCIAL FUND** | **June 30, 2009*****(Unaudited)*** |
|--------------------------|------------------------------------|

 

| **Shares**                      |                                                  | **Security**                                                |   | **Value****(Note 1)** |       |
|---------------------------------|-------------------------------------------------------|-------------------------------------------------------------|--------|-----------------------|------------|
| **COMMONSTOCK– (98.74%)** |                                                  |
|                            | **CONSUMER DISCRETIONARY – (1.22%)**            |                                                        |
|                            | **Consumer Services – (1.22%)**                 |                                                        |
|                            | 402,100                                               | H&R Block, Inc.                                         |   | $                     | 6,928,183  |   |
|                                 |
|                            | **TOTALCONSUMERDISCRETIONARY**                        |                                                        |   | **6,928,183**         |       |
|                                 |
|                            | **ENERGY – (4.98%)**                            |                                                        |
|                            | 540,100                                               | Canadian Natural Resources Ltd. (Canada)                    |   |                  | 28,349,849 |   |
|                                 |
|                            | **TOTALENERGY**                                       |                                                        |   | **28,349,849**        |       |
|                                 |
|                            | **FINANCIALS – (86.11%)**                       |                                                        |
|                            | **Banks – (12.85%)**                            |                                                        |
|                            | **Commercial Banks – (12.85%)**                 |                                                        |
|                            | 150,700                                               | ICICI Bank Ltd., ADR (India)                                |   |                  | 4,445,650  |   |
|                            | 459,950                                               | State Bank of India Ltd., GDR (India)                       |   |                  | 32,656,450 |   |
|                            | 1,485,800                                             | Wells Fargo & Co.                                       |   |                  | 36,045,508 |   |
|                                 |
|                            |                                                       | 73,147,608                                                  |   |
|                                 |
|                            | **Diversified Financials – (39.93%)**           |                                                        |
|                            | **Capital Markets – (19.16%)**                  |                                                        |
|                            | 393,500                                               | Ameriprise Financial, Inc.                                  |   |                  | 9,550,245  |   |
|                            | 958,200                                               | Bank of New York Mellon Corp.                               |   |                  | 28,084,842 |   |
|                            | 792,600                                               | Brookfield Asset Management Inc., Class A (Canada)          |   |                  | 13,529,682 |   |
|                            | 143,200                                               | Charles Schwab Corp.                                        |   |                  | 2,511,012  |   |
|                            | 157,400                                               | Goldman Sachs Group, Inc.                                   |   |                  | 23,207,056 |   |
|                            | 777,200                                               | Julius Baer Holding AG (Switzerland)                        |   |                  | 30,170,997 |   |
|                            | 47,200                                                | T. Rowe Price Group Inc.                                    |   |                  | 1,967,296  |   |
|                                 |
|                            | 109,021,130                                           |                                                        |
|                                 |
|                            | **Consumer Finance – (8.48%)**                  |                                                        |
|                            | 1,949,000                                             | American Express Co.                                        |   |                  | 45,294,760 |   |
|                            | 1,483,200                                             | First Marblehead Corp. *                                    |   |                  | 2,996,064  |   |
|                                 |
|                            | 48,290,824                                            |                                                        |
|                                 |
|                            | **Diversified Financial Services – (12.29%)**   |                                                        |
|                            | 137,820                                               | Bank of America Corp.                                       |   |                  | 1,819,224  |   |
|                            | 192,300                                               | Cia Brasileira de Meios de Pagamento SA (Visanet) (Brazil)* |   |                  | 1,653,613  |   |
|                            | 154,060                                               | JPMorgan Chase & Co.                                    |   |                  | 5,254,987  |   |
|                            | 872,600                                               | Moody's Corp.                                               |   |                  | 22,993,010 |   |
|                            | 1,102,000                                             | Oaktree Capital Group LLC, Class A (a)                      |   |                  | 23,693,000 |   |
|                            | 106,400                                               | RHJ International (Belgium)*                                |   |                  | 679,147    |   |
|                            | 396,550                                               | RHJ International, 144A (Belgium)*(b)(c)                    |   |                  | 2,530,782  |   |
|                            | 182,000                                               | Visa Inc., Class A                                          |   |                  | 11,331,320 |   |
|                                 |
|                            | 69,955,083                                            |                                                        |
|                                 |
|                            |                                                       | 227,267,037                                                 |   |
|                                 |
|                            | **Insurance – (33.33%)**                        |                                                        |
|                            | **Life & Health Insurance – (2.97%)**       |                                                        |
|                            | 304,733                                               | China Life Insurance Co., Ltd., ADR (China)                 |   |                  | 16,894,397 |   |
|                                 |
|                            | **Multi-line Insurance – (7.08%)**              |                                                        |
|                            | 1,470,600                                             | Loews Corp.                                                 |   |                  | 40,294,440 |   |
|                                 |
|                            | **Property & Casualty Insurance – (9.84%)** |                                                        |
|                            | 201,500                                               | ACE Ltd.                                                    |   |                  | 8,912,345  |   |
|                            | 194,300                                               | FPIC Insurance Group, Inc. *                                |   |                  | 5,951,409  |   |
|                            | 79,200                                                | Markel Corp. *                                              |   |                  | 22,310,640 |   |
|                                 |                                                       |                                                             |        |                       |            |  |  |  |  |  |  |  |  |  |

 

 

29

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS FINANCIAL FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|----------------------------------------|------------------------------------|

 

| **Shares/Principal**                    |                                                                                                                                                          | **Security**                                               |                                                                         | **Value****(Note 1)** |       |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------------------------|-----------------------|------------|
| **COMMON STOCK – (CONTINUED)**    |                                                                                                                                                          |
|                                    | **FINANCIALS – (CONTINUED)**                                                                                                                            |                                                       |
|                                    | **Insurance – (Continued)**                                                                                                                             |                                                       |
|                                    | **Property & Casualty Insurance – (Continued)**                                                                                                     |                                                       |
|                                    | 1,244,000                                                                                                                                                     | Progressive Corp. (Ohio) *                                 |                                                                         | $                     | 18,796,840 |   |
|                                         |
|                                    | 55,971,234                                                                                                                                                    |                                                       |
|                                         |
|                                    | **Reinsurance – (13.44%)**                                                                                                                              |                                                       |
|                                    | 225,000                                                                                                                                                       | Everest Re Group, Ltd.                                     |                                                                         |                  | 16,103,250 |   |
|                                    | 1,394,187                                                                                                                                                     | Transatlantic Holdings, Inc.                               |                                                                         |                  | 60,410,123 |   |
|                                         |
|                                    | 76,513,373                                                                                                                                                    |                                                       |
|                                         |
|                                    |                                                                                                                                                               | 189,673,444                                                |                                                                         |
|                                         |
|                                    | **TOTALFINANCIALS**                                                                                                                                           |                                                       |                                                                         | **490,088,089**       |       |
|                                         |
|                                    | **INDUSTRIALS – (3.46%)**                                                                                                                               |                                                       |
|                                    | **Commercial & Professional Services – (3.46%)**                                                                                                    |                                                       |
|                                    | 242,650                                                                                                                                                       | D&B Corp.                                              |                                                                         |                  | 19,705,606 |   |
|                                         |
|                                    | **TOTALINDUSTRIALS**                                                                                                                                          |                                                       |                                                                         | **19,705,606**        |       |
|                                         |
|                                    | **MATERIALS – (2.97%)**                                                                                                                                 |                                                       |
|                                    | 918,000                                                                                                                                                       | Sealed Air Corp.                                           |                                                                         |                  | 16,937,100 |   |
|                                         |
|                                    | **TOTALMATERIALS**                                                                                                                                            |                                                       |                                                                         | **16,937,100**        |       |
|                                         |
|                                    | **TOTAL COMMON STOCK – (Identified cost $500,759,405)**                                                                                                 |                                                       |                                                                         | **562,008,827**       |       |
|                                         |
| **SHORTTERMINVESTMENTS– (1.46%)** |                                                                                                                                                          |
| $                                       | 2,563,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                         |
|                                    | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $2,563,005                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $2,614,260)               |                                                       |                                                                         | 2,563,000             |       |
|                                    | 1,643,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                         |
|                                    | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $1,643,001                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $1,675,860)                |                                                       |                                                                         | 1,643,000             |       |
|                                    | 4,107,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                         |
|                                    | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $4,107,013                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $4,189,140) |                                                       |                                                                         | 4,107,000             |       |
|                                         |
|                                    | **TOTAL SHORT TERM INVESTMENTS – (Identified cost $8,313,000)**                                                                                         |                                                       |                                                                         | **8,313,000**         |       |
|                                         |
|                                    | Total Investments – (100.20%) – (Identified cost $509,072,405) – (d)                                                                        |                                                       |                                                                         | 570,321,827           |       |
|                                    | Liabilities Less Other Assets – (0.20%)                                                                                                                 |                                                       |                                                                         | (1,166,384)           |       |
|                                         |
|                                    | Net Assets – (100.00%)                                                                                                                                  |                                                       | $                                                                            | 569,155,443           |       |
|                                         |
|                                         |
|                                    | ADR: American Depositary Receipt                                                                                                                              |                                                       |                                                                         |
|                                    | GDR: Global Depositary Receipt                                                                                                                                |                                                       |                                                                         |
|                                    | *                                                                                                                                                             |                                                       | Non-Income producing security.                                               |                  |       |
|                                    | (a)                                                                                                                                                           |                                                       | Illiquid Security – See Note 8 of the Notes to Financial Statements.   |                  |       |
|                                    | (b)                                                                                                                                                           |                                                       | Restricted Security – See Note 8 of the Notes to Financial Statements. |                  |       |
|                                    |                                                                                                                                                          |                                                       |                                                                         |                  |       |
|                                         |                                                                                                                                                               |                                                            |                                                                              |                       |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

30

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS FINANCIAL FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|----------------------------------------|------------------------------------|

 

|                                    | (c)                         |   | These securities are subject to Rule 144A. The Board of Directors of the Fund has determined that there is sufficient liquidity in these securities to realize current valuations. These securities amounted to $2,530,782, or 0.44% of the Fund's net assets, as of June 30, 2009. |         |   |
|-----------------------------------------|-----------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------|
|                                    | (d)                         |   | Aggregate cost for federal income tax purposes is $509,131,652. At June 30, 2009 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows:                                                                                                |         |   |
|                                    | Unrealized appreciation     |   | $                                                                                                                                                                                                                                                                                   | 127,711,360  |   |
|                                    | Unrealized depreciation     |   |                                                                                                                                                                                                                                                                                | (66,521,185) |   |
|                                         |
|                                    | Net unrealized appreciation |   | $                                                                                                                                                                                                                                                                                   | 61,190,175   |   |
|                                         |
|                                         |
| ***See Notes to Financial Statements*** |                        |
|                                         |                             |        |                                                                                                                                                                                                                                                                                     |              |        |  |  |  |  |  |

 

 

31

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS APPRECIATION & INCOME FUND** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Shares**                      |                                                     | **Security**                             |   | **Value****(Note 1)** |
|---------------------------------|----------------------------------------------------------|------------------------------------------|--------|-----------------------|
| **COMMONSTOCK– (49.44%)** |                                                     |
|                            | **CONSUMER DISCRETIONARY – (7.31%)**               |                                     |
|                            | **Media – (1.58%)**                                |                                     |
|                            | 654,000                                                  | News Corp., Class A                      |   | $                     | 5,961,210 |   |
|                                 |
|                            | **Retailing – (5.73%)**                            |                                     |
|                            | 69,713                                                   | Amazon.com, Inc. *                       |   |                  | 5,833,932 |   |
|                            | 366,900                                                  | Kohl's Corp. *                           |   |                  | 15,684,975 |   |
|                                 |
|                            |                                                          | 21,518,907                               |   |
|                                 |
|                            | **TOTALCONSUMERDISCRETIONARY**                           |                                     |   | **27,480,117**        |   |
|                                 |
|                            | **CONSUMER STAPLES – (9.93%)**                     |                                     |
|                            | **Food & Staples Retailing – (4.56%)**         |                                     |
|                            | 901,800                                                  | Whole Foods Market, Inc. *               |   |                  | 17,129,691 |   |
|                                 |
|                            | **Food, Beverage & Tobacco – (3.23%)**         |                                     |
|                            | 962,300                                                  | Tyson Foods, Inc., Class A               |   |                  | 12,134,603 |   |
|                                 |
|                            | **Household & Personal Products – (2.14%)**    |                                     |
|                            | 312,200                                                  | Avon Products, Inc.                      |   |                  | 8,048,516 |   |
|                                 |
|                            | **TOTALCONSUMERSTAPLES**                                 |                                     |   | **37,312,810**        |   |
|                                 |
|                            | **ENERGY – (5.13%)**                               |                                     |
|                            | 219,000                                                  | Devon Energy Corp.                       |   |                  | 11,935,500 |   |
|                            | 472,000                                                  | Nabors Industries Ltd. *                 |   |                  | 7,353,760 |   |
|                                 |
|                            | **TOTALENERGY**                                          |                                     |   | **19,289,260**        |   |
|                                 |
|                            | **FINANCIALS – (7.77%)**                           |                                     |
|                            | **Diversified Financials – (4.14%)**               |                                     |
|                            | **Consumer Finance – (1.83%)**                     |                                     |
|                            | 295,000                                                  | American Express Co.                     |   |                  | 6,855,800 |   |
|                                 |
|                            | **Diversified Financial Services – (2.31%)**       |                                     |
|                            | 658,476                                                  | Bank of America Corp.                    |   |                  | 8,691,883 |   |
|                                 |
|                            |                                                          | 15,547,683                               |   |
|                                 |
|                            | **Insurance – (0.19%)**                            |                                     |
|                            | **Property & Casualty Insurance – (0.19%)**    |                                     |
|                            | 772,300                                                  | Ambac Financial Group, Inc. *            |   |                  | 710,516 |   |
|                                 |
|                            | **Real Estate – (3.44%)**                          |                                     |
|                            | 535,040                                                  | Forest City Enterprises, Inc., Class A * |   |                  | 3,531,264 |   |
|                            | 410,000                                                  | SL Green Realty Corp.                    |   |                  | 9,405,400 |   |
|                                 |
|                            |                                                          | 12,936,664                               |   |
|                                 |
|                            | **TOTALFINANCIALS**                                      |                                     |   | **29,194,863**        |   |
|                                 |
|                            | **HEALTH CARE – (2.09%)**                          |                                     |
|                            | **Health Care Equipment & Services – (2.09%)** |                                     |
|                            | 160,500                                                  | Universal Health Services, Inc., Class B |   |                  | 7,840,425 |   |
|                                 |
|                            | **TOTALHEALTHCARE**                                      |                                     |   | **7,840,425**         |   |
|                                 |
|                            | **INDUSTRIALS – (10.28%)**                         |                                     |
|                            | **Capital Goods – (7.64%)**                        |                                     |
|                            | 421,200                                                  | General Electric Co.                     |   |                  | 4,936,464 |   |
|                            | 597,900                                                  | Masco Corp.                              |   |                  | 5,727,882 |   |
|                            | 723,290                                                  | Quanta Services, Inc. *                  |   |                  | 16,729,698 |   |
|                            | 200,000                                                  | United Rentals, Inc. *                   |   |                  | 1,298,000 |   |
|                                 |
|                            |                                                          | 28,692,044                               |   |
|                                 |
|                                 |                                                          |                                          |        |                       |  |  |  |  |  |  |  |  |  |  |  |

 

 

32

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS APPRECIATION & INCOME FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|--------------------------------------------------------|------------------------------------|

 

| **Shares**                                    |                                                                             | **Security**                                                       |   | **Value****(Note 1)** |       |
|-----------------------------------------------|----------------------------------------------------------------------------------|--------------------------------------------------------------------|--------|-----------------------|------------|
| **COMMON STOCK – (CONTINUED)**          |                                                                             |
|                                          | **INDUSTRIALS – (CONTINUED)**                                              |                                                               |
|                                          | **Commercial & Professional Services – (2.64%)**                       |                                                               |
|                                          | 120,000                                                                          | School Specialty, Inc. *                                           |   | $                     | 2,425,800  |   |
|                                          | 290,000                                                                          | Waste Connections, Inc. *                                          |   |                  | 7,513,900  |   |
|                                               |
|                                          |                                                                                  | 9,939,700                                                          |   |
|                                               |
|                                          | **TOTALINDUSTRIALS**                                                             |                                                               |   | **38,631,744**        |       |
|                                               |
|                                          | **INFORMATION TECHNOLOGY – (3.39%)**                                       |                                                               |
|                                          | **Semiconductors & Semiconductor Equipment – (3.39%)**                 |                                                               |
|                                          | 457,900                                                                          | Fairchild Semiconductor International, Inc. *                      |   |                  | 3,200,721  |   |
|                                          | 310,000                                                                          | Intel Corp.                                                        |   |                  | 5,122,750  |   |
|                                          | 296,700                                                                          | International Rectifier Corp. *                                    |   |                  | 4,394,127  |   |
|                                               |
|                                          |                                                                                  | 12,717,598                                                         |   |
|                                               |
|                                          | **TOTALINFORMATIONTECHNOLOGY**                                                   |                                                               |   | **12,717,598**        |       |
|                                               |
|                                          | **MATERIALS – (1.74%)**                                                    |                                                               |
|                                          | 355,000                                                                          | Sealed Air Corp.                                                   |   |                  | 6,549,750  |   |
|                                               |
|                                          | **TOTALMATERIALS**                                                               |                                                               |   | **6,549,750**         |       |
|                                               |
|                                          | **UTILITIES – (1.80%)**                                                    |                                                               |
|                                          | 580,700                                                                          | AES Corp. *                                                        |   |                  | 6,741,927  |   |
|                                               |
|                                          | **TOTALUTILITIES**                                                               |                                                               |   | **6,741,927**         |       |
|                                               |
|                                          | **TOTAL COMMON STOCK – (Identified cost $325,667,043)**                    |                                                               |   | **185,758,494**       |       |
|                                               |
| **CONVERTIBLEPREFERREDSTOCK– (11.80%)** |                                                                             |
|                                          | **FINANCIALS – (5.66%)**                                                   |                                                               |
|                                          | **Diversified Financials – (3.60%)**                                       |                                                               |
|                                          | **Diversified Financial Services – (3.60%)**                               |                                                               |
|                                          | 400,000                                                                          | Citigroup Inc., 6.50%, Conv. Pfd.                                  |   |                  | 13,525,000 |   |
|                                               |
|                                          | **Real Estate – (2.06%)**                                                  |                                                               |
|                                          | 393,710                                                                          | Alexandria Real Estate Equities, Inc., 7.00%, Series D, Conv. Pfd. |   |                  | 5,307,211  |   |
|                                          | 110,000                                                                          | Digital Realty Trust, Inc., 5.50%, Series D, Cum. Conv. Pfd.       |   |                  | 2,444,068  |   |
|                                               |
|                                          |                                                                                  | 7,751,279                                                          |   |
|                                               |
|                                          | **TOTALFINANCIALS**                                                              |                                                               |   | **21,276,279**        |       |
|                                               |
|                                          | **INDUSTRIALS – (1.14%)**                                                  |                                                               |
|                                          | **Capital Goods – (0.56%)**                                                |                                                               |
|                                          | 109,741                                                                          | United Rentals Trust I, 6.50%, Conv. Pfd.                          |   |                  | 2,085,079  |   |
|                                               |
|                                          | **Transportation – (0.58%)**                                               |                                                               |
|                                          | 161,300                                                                          | Continental Airlines Finance Trust II, 6.00%, Cum. Conv. Pfd.      |   |                  | 2,187,631  |   |
|                                               |
|                                          | **TOTALINDUSTRIALS**                                                             |                                                               |   | **4,272,710**         |       |
|                                               |
|                                          | **MATERIALS – (1.70%)**                                                    |                                                               |
|                                          | 80,000                                                                           | Freeport-McMoRan Copper & Gold, Inc., 6.75%, Conv. Pfd.        |   |                  | 6,380,000  |   |
|                                               |
|                                          | **TOTALMATERIALS**                                                               |                                                               |   | **6,380,000**         |       |
|                                               |
|                                          | **UTILITIES – (3.30%)**                                                    |                                                               |
|                                          | 288,810                                                                          | AES Trust III, 6.75%, Conv. Pfd.                                   |   |                  | 12,418,830 |   |
|                                               |
|                                          | **TOTALUTILITIES**                                                               |                                                               |   | **12,418,830**        |       |
|                                               |
|                                          | **TOTAL CONVERTIBLE PREFERRED STOCK –**

**(Identified cost $50,012,212)** |                                                               |   | **44,347,819**        |       |
|                                               |
|                                               |                                                                                  |                                                                    |        |                       |            |  |  |  |  |  |  |  |  |  |

 

 

33

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS APPRECIATION & INCOME FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|--------------------------------------------------------|------------------------------------|

 

| **Principal**                        |                                                                   | **Security**                                                                                                   |   | **Value****(Note 1)** |       |
|--------------------------------------|------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|--------|-----------------------|------------|
| **CONVERTIBLEBONDS– (33.73%)** |                                                                   |
|                                 | **CONSUMER DISCRETIONARY – (2.68%)**                             |                                                                                                           |
|                                 | **Media – (2.68%)**                                              |                                                                                                           |
| $                                    | 16,050,000                                                             | News America Inc., Conv. Notes, Zero coupon, 3.38%, 02/28/21 (a)(b)(c)                                         |   | $                     | 10,061,889 |   |
|                                      |
|                                 | **TOTALCONSUMERDISCRETIONARY**                                         |                                                                                                           |   | **10,061,889**        |       |
|                                      |
|                                 | **CONSUMER STAPLES – (3.78%)**                                   |                                                                                                           |
|                                 | **Food, Beverage & Tobacco – (3.78%)**                       |                                                                                                           |
|                                 | 14,000,000                                                             | Tyson Foods, Inc., Conv. Sr. Notes, 3.25%, 10/15/13                                                            |   |                  | 14,192,500 |   |
|                                      |
|                                 | **TOTALCONSUMERSTAPLES**                                               |                                                                                                           |   | **14,192,500**        |       |
|                                      |
|                                 | **ENERGY – (0.62%)**                                             |                                                                                                           |
|                                 | 2,500,000                                                              | Nabors Industries Inc., Conv. Sr. Notes, 0.94%, 05/15/11                                                       |   |                  | 2,337,500  |   |
|                                      |
|                                 | **TOTALENERGY**                                                        |                                                                                                           |   | **2,337,500**         |       |
|                                      |
|                                 | **FINANCIALS – (9.73%)**                                         |                                                                                                           |
|                                 | **Real Estate – (9.73%)**                                        |                                                                                                           |
|                                 | 7,750,000                                                              | Digital Realty Trust, Inc., 144A Conv. Sr. Notes, 4.125%, 08/15/26 (d)                                         |   |                  | 9,261,250  |   |
|                                 | 23,000,000                                                             | Forest City Enterprises, Inc., Class A, Conv. Sr. Notes, 3.625%, 10/15/11                                      |   |                  | 18,638,280 |   |
|                                 | 9,000,000                                                              | Reckson Operating Partnership, L.P., Conv. Sr. Notes (Convertible into SL Green Realty Corp.), 4.00%, 06/15/25 |   |                  | 8,651,250  |   |
|                                      |
|                                 |                                                                        | 36,550,780                                                                                                     |   |
|                                      |
|                                 | **TOTALFINANCIALS**                                                    |                                                                                                           |   | **36,550,780**        |       |
|                                      |
|                                 | **HEALTH CARE – (1.08%)**                                        |                                                                                                           |
|                                 | **Pharmaceuticals, Biotechnology & Life Sciences – (1.08%)** |                                                                                                           |
|                                 | 3,900,000                                                              | Valeant Pharmaceuticals International, Conv. Sub. Notes, 4.00%, 11/15/13                                       |   |                  | 4,070,625  |   |
|                                      |
|                                 | **TOTALHEALTHCARE**                                                    |                                                                                                           |   | **4,070,625**         |       |
|                                      |
|                                 | **INDUSTRIALS – (10.82%)**                                       |                                                                                                           |
|                                 | **Capital Goods – (0.91%)**                                      |                                                                                                           |
|                                 | 3,720,000                                                              | United Rentals North America Inc., Conv. Sr. Sub., 1.875%, 10/15/23                                            |   |                  | 3,431,700  |   |
|                                      |
|                                 | **Commercial & Professional Services – (9.91%)**             |                                                                                                           |
|                                 | 8,500,000                                                              | School Specialty, Inc., Conv. Sub. Deb., 3.75%, 11/30/26                                                       |   |                  | 7,023,125  |   |
|                                 | 22,101,000                                                             | School Specialty, Inc., Conv. Sub. Notes, 3.75%/Zero coupon, 08/01/23 (e)                                      |   |                  | 20,940,698 |   |
|                                 | 9,000,000                                                              | Waste Connections, Inc., Conv. Sr. Notes, 3.75%, 04/01/26                                                      |   |                  | 9,247,500  |   |
|                                      |
|                                 |                                                                        | 37,211,323                                                                                                     |   |
|                                      |
|                                 | **TOTALINDUSTRIALS**                                                   |                                                                                                           |   | **40,643,023**        |       |
|                                      |
|                                 | **INFORMATION TECHNOLOGY – (2.14%)**                             |                                                                                                           |
|                                 | **Semiconductors & Semiconductor Equipment – (2.14%)**       |                                                                                                           |
|                                 | 9,500,000                                                              | Intel Corp., Conv. Sub. Deb., 2.95%, 12/15/35                                                                  |   |                  | 8,027,500  |   |
|                                      |
|                                 | **TOTALINFORMATIONTECHNOLOGY**                                         |                                                                                                           |   | **8,027,500**         |       |
|                                      |
|                                 | **MATERIALS – (2.88%)**                                          |                                                                                                           |
|                                 | 4,900,000                                                              | Sealed Air Corp., 144A Conv. Sr. Notes, 3.00%, 06/30/33 (d)                                                    |   |                  | 4,930,625  |   |
|                                 | 4,500,000                                                              | United States Steel Corp., Conv. Sr. Notes, 4.00%, 05/15/14                                                    |   |                  | 5,911,875  |   |
|                                      |
|                                 | **TOTALMATERIALS**                                                     |                                                                                                           |   | **10,842,500**        |       |
|                                      |
|                                 | **TOTAL CONVERTIBLE BONDS – (Identified cost $135,243,331)**     |                                                                                                           |   | **126,726,317**       |       |
|                                      |
| **CORPORATEBONDS– (3.46%)**    |                                                                   |
|                                 | **CONSUMER DISCRETIONARY – (0.69%)**                             |                                                                                                           |
|                                 | **Retailing – (0.69%)**                                          |                                                                                                           |
|                                 | 2,500,000                                                              | Kohl's Corp., Sr. Notes, 6.25%, 12/15/17                                                                       |   |                  | 2,574,988  |   |
|                                      |
|                                 | **TOTALCONSUMERDISCRETIONARY**                                         |                                                                                                           |   | **2,574,988**         |       |
|                                      |
|                                      |                                                                        |                                                                                                                |        |                       |            |  |  |  |  |  |  |  |  |

 

 

34

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS APPRECIATION & INCOME FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|--------------------------------------------------------|------------------------------------|

 

| **Principal**                           |                                                                                                                                                          | **Security**                                               |                                                                                                                                                                                                                                                                                 | **Value****(Note 1)** |       |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|------------|
| **CORPORATE BONDS – (CONTINUED)** |                                                                                                                                                          |
|                                    | **FINANCIALS – (0.09%)**                                                                                                                                |                                                       |
|                                    | **Real Estate – (0.09%)**                                                                                                                               |                                                       |
| $                                       | 14,000,000                                                                                                                                                    | Thornburg Mortgage, Inc., Sr. Notes, 8.00%, 05/15/13 (a)   |                                                                                                                                                                                                                                                                                 | $                     | 350,000    |   |
|                                         |
|                                    | **TOTALFINANCIALS**                                                                                                                                           |                                                       |                                                                                                                                                                                                                                                                                 | **350,000**           |       |
|                                         |
|                                    | **INDUSTRIALS – (2.68%)**                                                                                                                               |                                                       |
|                                    | **Capital Goods – (2.68%)**                                                                                                                             |                                                       |
|                                    | 12,000,000                                                                                                                                                    | Masco Corp., 6.125%, 10/03/16                              |                                                                                                                                                                                                                                                                                 |                  | 10,089,180 |   |
|                                         |
|                                    | **TOTALINDUSTRIALS**                                                                                                                                          |                                                       |                                                                                                                                                                                                                                                                                 | **10,089,180**        |       |
|                                         |
|                                    | **TOTAL CORPORATE BONDS – (Identified cost $26,681,400)**                                                                                               |                                                       |                                                                                                                                                                                                                                                                                 | **13,014,168**        |       |
|                                         |
| **SHORTTERMINVESTMENTS– (1.43%)** |                                                                                                                                                          |
|                                    | 1,654,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                                                                                                                                                                                                                                 |
|                                    | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $1,654,003                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $1,687,080)               |                                                       |                                                                                                                                                                                                                                                                                 | 1,654,000             |       |
|                                    | 1,060,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                                                                                                                                                                                                                                 |
|                                    | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $1,060,001                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $1,081,200)                |                                                       |                                                                                                                                                                                                                                                                                 | 1,060,000             |       |
|                                    | 2,651,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                                                                                                                                                                                                                                 |
|                                    | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $2,651,008                                                                                               |                                                       |
|                                    | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $2,704,020) |                                                       |                                                                                                                                                                                                                                                                                 | 2,651,000             |       |
|                                         |
|                                    | **TOTAL SHORT TERM INVESTMENTS – (Identified cost $5,365,000)**                                                                                         |                                                       |                                                                                                                                                                                                                                                                                 | **5,365,000**         |       |
|                                         |
|                                    | Total Investments – (99.86%) – (Identified cost $542,968,986) – (f)                                                                         |                                                       |                                                                                                                                                                                                                                                                                 | 375,211,798           |       |
|                                    | Other Assets Less Liabilities – (0.14%)                                                                                                                 |                                                       |                                                                                                                                                                                                                                                                                 | 513,256               |       |
|                                         |
|                                    | Net Assets – (100.00%)                                                                                                                                  |                                                       | $                                                                                                                                                                                                                                                                                    | 375,725,054           |       |
|                                         |
|                                         |
|                                    | *                                                                                                                                                             |                                                       | Non-Income producing security.                                                                                                                                                                                                                                                       |                  |       |
|                                    | (a)                                                                                                                                                           |                                                       | Illiquid Security – See Note 8 of the Notes to Financial Statements.                                                                                                                                                                                                           |                  |       |
|                                    | (b)                                                                                                                                                           |                                                       | As of June 30, 2009, zero coupon bonds represented $10,061,889, or 2.68% of the Fund's net assets. Because zero coupon bonds pay no interest their value is generally more volatile than the value of other debt securities.                                                         |                  |       |
|                                    | (c)                                                                                                                                                           |                                                       | Zero coupon bonds reflect the effective yield on the date of purchase.                                                                                                                                                                                                               |                  |       |
|                                    | (d)                                                                                                                                                           |                                                       | These securities are subject to Rule 144A. The Board of Directors of the Fund has determined that there is sufficient liquidity in these securities to realize current valuations. These securities amounted to $14,191,875, or 3.78% of the Fund's net assets, as of June 30, 2009. |                  |       |
|                                    | (e)                                                                                                                                                           |                                                       | Represents a step-down bond: a bond that pays one coupon rate for an initial period followed by a lower coupon rate.                                                                                                                                                                 |                  |       |
|                                    | (f)                                                                                                                                                           |                                                       | Aggregate cost for federal income tax purposes is $543,156,482. At June 30, 2009 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows:                                                                                                 |                  |       |
|                                    | Unrealized appreciation                                                                                                                                       |                                                       | $                                                                                                                                                                                                                                                                                    | 15,276,005            |       |
|                                    | Unrealized depreciation                                                                                                                                       |                                                       |                                                                                                                                                                                                                                                                                 | (183,220,689)         |       |
|                                         |
|                                    | Net unrealized depreciation                                                                                                                                   |                                                       | $                                                                                                                                                                                                                                                                                    | (167,944,684)         |       |
|                                         |
|                                         |
| ***See Notes to Financial Statements*** |
|                                         |                                                                                                                                                               |                                                            |                                                                                                                                                                                                                                                                                      |                       |            |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

35

 

----

 

| **DAVIS SERIES, INC.** | **Schedule of Investments** |
|------------------------|-----------------------------|

| **DAVIS REAL ESTATE FUND** | **June 30, 2009*****(Unaudited)*** |
|----------------------------|------------------------------------|

 

| **Shares**                      |                                                          | **Security**                                       |   | **Value****(Note 1)** |       |
|---------------------------------|---------------------------------------------------------------|----------------------------------------------------|--------|-----------------------|------------|
| **COMMONSTOCK– (79.87%)** |                                                          |
|                            | **FINANCIALS – (72.52%)**                               |                                               |
|                            | **Diversified Financials – (2.11%)**                    |                                               |
|                            | **Capital Markets – (2.11%)**                           |                                               |
|                            | 283,450                                                       | Brookfield Asset Management Inc., Class A (Canada) |   | $                     | 4,838,492  |   |
|                                 |
|                            | **Real Estate – (70.41%)**                              |                                               |
|                            | **Real Estate Investment Trusts (REITs) – (59.65%)**    |                                               |
|                            | **Diversified REITs – (4.72%)**                         |                                               |
|                            | 882,511                                                       | Cousins Properties, Inc.                           |   |                  | 7,501,343  |   |
|                            | 73,000                                                        | Vornado Realty Trust                               |   |                  | 3,287,190  |   |
|                                 |
|                            | 10,788,533                                                    |                                               |
|                                 |
|                            | **Industrial REITs – (4.98%)**                          |                                               |
|                            | 145,000                                                       | AMB Property Corp.                                 |   |                  | 2,727,450  |   |
|                            | 2,120,200                                                     | DCT Industrial Trust Inc.                          |   |                  | 8,650,416  |   |
|                                 |
|                            | 11,377,866                                                    |                                               |
|                                 |
|                            | **Office REITs – (22.23%)**                             |                                               |
|                            | 213,613                                                       | Alexandria Real Estate Equities, Inc.              |   |                  | 7,645,209  |   |
|                            | 48,200                                                        | Boston Properties, Inc.                            |   |                  | 2,299,140  |   |
|                            | 442,638                                                       | Corporate Office Properties Trust                  |   |                  | 12,982,573 |   |
|                            | 210,400                                                       | Digital Realty Trust, Inc.                         |   |                  | 7,542,840  |   |
|                            | 798,600                                                       | Douglas Emmett, Inc.                               |   |                  | 7,179,414  |   |
|                            | 74,400                                                        | Highwoods Properties, Inc.                         |   |                  | 1,664,328  |   |
|                            | 45,000                                                        | Kilroy Realty Corp.                                |   |                  | 924,300    |   |
|                            | 462,100                                                       | SL Green Realty Corp.                              |   |                  | 10,600,574 |   |
|                                 |
|                            | 50,838,378                                                    |                                               |
|                                 |
|                            | **Residential REITs – (11.30%)**                        |                                               |
|                            | 795,600                                                       | American Campus Communities, Inc.                  |   |                  | 17,646,408 |   |
|                            | 131,800                                                       | Essex Property Trust, Inc.                         |   |                  | 8,201,914  |   |
|                                 |
|                            | 25,848,322                                                    |                                               |
|                                 |
|                            | **Retail REITs – (8.92%)**                              |                                               |
|                            | 787,060                                                       | CBL & Associates Properties, Inc.              |   |                  | 4,242,253  |   |
|                            | 176,700                                                       | Federal Realty Investment Trust                    |   |                  | 9,103,584  |   |
|                            | 262,100                                                       | Taubman Centers, Inc.                              |   |                  | 7,040,006  |   |
|                                 |
|                            | 20,385,843                                                    |                                               |
|                                 |
|                            | **Specialized REITs – (7.50%)**                         |                                               |
|                            | 822,547                                                       | Cogdell Spencer, Inc.                              |   |                  | 3,528,727  |   |
|                            | 211,700                                                       | Host Hotels & Resorts Inc. *                   |   |                  | 1,776,163  |   |
|                            | 396,500                                                       | Ventas, Inc.                                       |   |                  | 11,839,490 |   |
|                                 |
|                            | 17,144,380                                                    |                                               |
|                                 |
|                            | 136,383,322                                                   |                                               |
|                                 |
|                            | **Real Estate Management & Development – (10.76%)** |                                               |
|                            | **Diversified Real Estate Activities – (4.39%)**        |                                               |
|                            | 378,750                                                       | St. Joe Co. *                                      |   |                  | 10,033,088 |   |
|                                 |
|                                 |                                                               |                                                    |        |                       |            |  |  |  |  |  |  |  |  |

 

 

36

 

----

**DAVIS SERIES,            INC.**                                                                                                                    **Schedule of Investments**

| **DAVIS REAL ESTATE FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Shares/Principal**                 |                                                             | **Security**                                                          |   | **Value****(Note 1)** |       |
|--------------------------------------|------------------------------------------------------------------|-----------------------------------------------------------------------|--------|-----------------------|------------|
| **COMMON STOCK – (CONTINUED)** |                                                             |
|                                 | **FINANCIALS – (CONTINUED)**                               |                                                                  |
|                                 | **Real Estate – (Continued)**                              |                                                                  |
|                                 | **Real Estate Management & Development – (Continued)** |                                                                  |
|                                 | **Real Estate Operating Companies – (6.37%)**              |                                                                  |
|                                 | 2,207,354                                                        | Forest City Enterprises, Inc., Class A *                              |   | $                     | 14,568,536 |   |
|                                      |
|                                 | 24,601,624                                                       |                                                                  |
|                                      |
|                                 |                                                                  | 160,984,946                                                           |   |
|                                      |
|                                 | **TOTALFINANCIALS**                                              |                                                                  |   | **165,823,438**       |       |
|                                      |
|                                 | **INDUSTRIALS – (7.35%)**                                  |                                                                  |
|                                 | **Transportation – (7.35%)**                               |                                                                  |
|                                 | 320,800                                                          | Alexander & Baldwin, Inc.                                         |   |                  | 7,519,552  |   |
|                                 | 126,100                                                          | Burlington Northern Santa Fe Corp.                                    |   |                  | 9,273,394  |   |
|                                      |
|                                 |                                                                  | 16,792,946                                                            |   |
|                                      |
|                                 | **TOTALINDUSTRIALS**                                             |                                                                  |   | **16,792,946**        |       |
|                                      |
|                                 | **TOTAL COMMON STOCK – (Identified cost $272,700,029)**    |                                                                  |   | **182,616,384**       |       |
|                                      |
| **PREFERREDSTOCK– (8.80%)**    |                                                             |
|                                 | **FINANCIALS – (8.80%)**                                   |                                                                  |
|                                 | **Real Estate – (8.80%)**                                  |                                                                  |
|                                 | **Real Estate Investment Trusts (REITs) – (8.80%)**        |                                                                  |
|                                 | **Industrial REITs – (1.36%)**                             |                                                                  |
|                                 | 171,000                                                          | AMB Property Corp., 6.75%, Series M                                   |   |                  | 3,102,795  |   |
|                                      |
|                                 | **Office REITs – (6.27%)**                                 |                                                                  |
|                                 | 468,943                                                          | Alexandria Real Estate Equities, Inc., 7.00%, Series D, Conv. Pfd.    |   |                  | 6,321,352  |   |
|                                 | 79,500                                                           | Digital Realty Trust, Inc., 5.50%, Series D, Cum. Conv. Pfd.          |   |                  | 1,766,394  |   |
|                                 | 71,693                                                           | Digital Realty Trust, Inc., 8.50%, Series A                           |   |                  | 1,581,010  |   |
|                                 | 280,910                                                          | SL Green Realty Corp., 7.625%, Series C                               |   |                  | 4,680,663  |   |
|                                      |
|                                 | 14,349,419                                                       |                                                                  |
|                                      |
|                                 | **Residential REITs – (0.50%)**                            |                                                                  |
|                                 | 43,700                                                           | Equity Residential, 7.00%, Series E, Cum. Conv. Pfd.                  |   |                  | 1,136,200  |   |
|                                      |
|                                 | **Retail REITs – (0.67%)**                                 |                                                                  |
|                                 | 114,160                                                          | CBL & Associates Properties, Inc., 7.375%, Series D               |   |                  | 1,525,463  |   |
|                                      |
|                                 | **TOTALFINANCIALS**                                              |                                                                  |   | **20,113,877**        |       |
|                                      |
|                                 | **TOTAL PREFERRED STOCK – (Identified cost $15,361,943)**  |                                                                  |   | **20,113,877**        |       |
|                                      |
| **CONVERTIBLEBONDS– (4.54%)**  |                                                             |
|                                 | **FINANCIALS – (4.54%)**                                   |                                                                  |
|                                 | **Real Estate – (4.54%)**                                  |                                                                  |
|                                 | **Real Estate Investment Trusts (REITs) – (4.54%)**        |                                                                  |
|                                 | **Industrial REITs – (2.01%)**                             |                                                                  |
| $                                    | 5,727,000                                                        | Prologis, Conv. Sr. Notes, 2.25%, 04/01/37                            |   |                  | 4,610,235  |   |
|                                      |
|                                 | **Office REITs – (2.53%)**                                 |                                                                  |
|                                 | 4,815,000                                                        | Digital Realty Trust, Inc., 144A Conv. Sr. Notes, 5.50%, 04/15/29 (a) |   |                  | 4,760,831  |   |
|                                 | 1,230,000                                                        | SL Green Realty Corp., 144A Conv. Sr. Notes, 3.00%, 03/30/27 (a)      |   |                  | 1,020,900  |   |
|                                      |
|                                 | 5,781,731                                                        |                                                                  |
|                                      |
|                                 | **TOTALFINANCIALS**                                              |                                                                  |   | **10,391,966**        |       |
|                                      |
|                                 | **TOTAL CONVERTIBLE BONDS – (Identified cost $8,285,565)** |                                                                  |   | **10,391,966**        |       |
|                                 |
|                                      |                                                                  |                                                                       |        |                       |            |  |  |  |  |  |  |  |  |  |  |

 

 

37

 

----

 

| **DAVIS SERIES, INC.** | **Schedule of Investments** |
|------------------------|-----------------------------|

| **DAVIS REAL ESTATE FUND - (CONTINUED)** | **June 30, 2009*****(Unaudited)*** |
|------------------------------------------|------------------------------------|

 

| **Principal**                                                                             |                                                                                                                                                          | **Security**                                               |                                                                                                                                                                                                                                                                                                       | **Value****(Note 1)** |             |
|-------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------|------------------|
| **SHORTTERMINVESTMENTS– (5.62%)**                                                   |                                                                                                                                                          |
| $                                                                                         | 3,964,000                                                                                                                                                     | Banc of America Securities LLC Joint Repurchase Agreement, |                                                                                                                                                                                                                                                                                                       |
|                                                                                      | 0.07%, 07/01/09, dated 06/30/09, repurchase value of $3,964,008                                                                                               |                                                       |
|                                                                                      | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 3.309%-6.462%, 03/01/29-01/01/39, total market value $4,043,280)               |                                                       | $                                                                                                                                                                                                                                                                                                          | 3,964,000             |             |
|                                                                                      | 2,540,000                                                                                                                                                     | Goldman, Sachs & Co. Joint Repurchase Agreement,       |                                                                                                                                                                                                                                                                                                       |
|                                                                                      | 0.03%, 07/01/09, dated 06/30/09, repurchase value of $2,540,002                                                                                               |                                                       |
|                                                                                      | (collateralized by: U.S. Government agency mortgages in a pooled cash account, 5.00%-6.153%, 06/01/36-09/01/38, total market value $2,590,800)                |                                                       |                                                                                                                                                                                                                                                                                                       | 2,540,000             |             |
|                                                                                      | 6,350,000                                                                                                                                                     | Mizuho Securities USA Inc. Joint Repurchase Agreement,     |                                                                                                                                                                                                                                                                                                       |
|                                                                                      | 0.11%, 07/01/09, dated 06/30/09, repurchase value of $6,350,019                                                                                               |                                                       |
|                                                                                      | (collateralized by: U.S. Government agency mortgages and obligations in a pooled cash account, 0.00%-6.50%, 07/17/09-11/01/47, total market value $6,477,000) |                                                       |                                                                                                                                                                                                                                                                                                       | 6,350,000             |             |
|                                                                                           |                                                                                                                                                          |
|                                                                                      | **TOTAL SHORT TERM INVESTMENTS – (Identified cost $12,854,000)**                                                                                        |                                                       |                                                                                                                                                                                                                                                                                                       | **12,854,000**        |             |
|                                                                                           |                                                                                                                                                          |
|                                                                                      | Total Investments – (98.83%) – (Identified cost $309,201,537) – (b)                                                                         |                                                       |                                                                                                                                                                                                                                                                                                       | 225,976,227           |             |
|                                                                                      | Other Assets Less Liabilities – (1.17%)                                                                                                                 |                                                       |                                                                                                                                                                                                                                                                                                       | 2,674,269             |             |
|                                                                                      | Net Assets – (100.00%)                                                                                                                                  |                                                       | $                                                                                                                                                                                                                                                                                                          | 228,650,496           |             |
|                                                                                           |                                                                                                                                                          |
|                                                                                      | *                                                                                                                                                             |                                                       | Non-Income producing security.                                                                                                                                                                                                                                                                             |                  |             |
|                                                                                      | (a)                                                                                                                                                           |                                                       | These securities are subject to Rule 144A. The Board of Directors of the Fund has determined that there is sufficient liquidity in these securities to realize current valuations. These securities amounted to $5,781,731, or 2.53% of the Fund's net assets, as of June 30, 2009.                        |                  |             |
|                                                                                      | (b)                                                                                                                                                           |                                                       | Aggregate cost for federal income tax purposes is $309,446,665. At June 30, 2009 unrealized appreciation (depreciation) of securities for federal income tax purposes is as follows:                                                                                                                       |                  |             |
|                                                                                      | Unrealized appreciation                                                                                                                                       |                                                       | $                                                                                                                                                                                                                                                                                                          | 10,864,401            |             |
|                                                                                      | Unrealized depreciation                                                                                                                                       |                                                       |                                                                                                                                                                                                                                                                                                       | (94,334,839)          |             |
|                                                                                      | Net unrealized depreciation                                                                                                                                   |                                                       | $                                                                                                                                                                                                                                                                                                          | (83,470,438)          |             |
|                                                                                           |                                                                                                                                                          |
|                                                                                      | (c)                                                                                                                                                           |                                                       | Affiliated Company. Represents ownership of at least 5% of the voting securities of the issuer and is an affiliate, as defined in the Investment Company Act of 1940, at or during the six months ended June 30, 2009. Transactions during the period in which the issuers were affiliates are as follows: |                  |             |
|                                                                                      |  

 

 

Security                                                                                                                              |                                                       |  

Shares

December 31, 

2008                                                                                                                                                                                                                                                                        |                  | Gross

Additions |   | Gross

Reductions |   | Shares

June 30,

2009 |   | Dividend

Income |   |
|                                                                                      | Cogdell Spencer, Inc. (1)                                                                                                                                     |                                                       | 1,222,847                                                                                                                                                                                                                                                                                                  |                  | –          |   | 400,300 |   | 822,547 | $ | 550,281 |   |
| (1) Not an affiliate as of June 30, 2009

***See Notes to Financial Statements***

  |
|                                                                                           |                                                                                                                                                               |                                                            |                                                                                                                                                                                                                                                                                                            |                       |                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

38

 

 

----

**DAVIS SERIES,            INC.**                                                                                               **Statements of Assets and Liabilities**

|   | **At June 30, 2009*****(Unaudited)*** |
|--------|---------------------------------------|

 

 

|                                                                                        |                                                                           |   | **Davis Opportunity Fund** |        |   | **Davis Government Bond Fund** |        |   | **Davis Government Money Market Fund** |        |   | **Davis Financial Fund** |        |   | **Davis Appreciation & Income Fund** |        |   | **Davis Real Estate Fund** |
|---------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------------|-------------|--------|----------------------------------------|-------------|--------|--------------------------|-------------|--------|------------------------------------------|-------------|--------|----------------------------|
| **ASSETS:**                                                                                 |                                                                           |
| Investments in securities at value* (see accompanying Schedules of Investments):            |                                                                           |
|                                                                                        | Unaffiliated companies                                                         |   | $                          | 460,356,938 |   | $                              | 167,089,412 |   | $                                      | 335,242,688 |   | $                        | 570,321,827 |   | $                                        | 375,211,798 |   | $                          | 225,976,227 |
|                                                                                        | Affiliated companies                                                           |   |                       | 718,500     |   |                           | –     |   |                                   | –     |   |                     | –     |   |                                     | –     |   |                       | – |
| Cash                                                                                        |                                                                           |   | 44,837                     |        |   | 4,776                          |        |   | 14,256                                 |        |   | 143,002                  |        |   | 63,747                                   |        |   | 2,382,740                  |
| Cash - foreign currencies**                                                                 |                                                                           |   | 388,027                    |        |   | –                        |        |   | –                                |        |   | –                  |        |   | –                                  |        |   | –                    |
| Receivables:                                                                                |                                                                           |
|                                                                                        | Capital stock sold                                                             |   |                       | 811,246     |   |                           | 448,498     |   |                                   | 26,070,501  |   |                     | 540,749     |   |                                     | 432,960     |   |                       | 304,191 |
|                                                                                        | Dividends and interest                                                         |   |                       | 499,550     |   |                           | 722,156     |   |                                   | 1,090,526   |   |                     | 1,314,819   |   |                                     | 1,440,141   |   |                       | 1,357,681 |
|                                                                                        | Investment securities sold                                                     |   |                       | –     |   |                           | –     |   |                                   | –     |   |                     | –     |   |                                     | –     |   |                       | 1,895,693 |
| Prepaid expenses                                                                            |                                                                           |   | 2,723                      |        |   | 299                            |        |   | 3,183                                  |        |   | 10,281                   |        |   | 1,938                                    |        |   | 2,393                      |
|                                                                                        | Total assets                                                                   |   |                       | 462,821,821 |   |                           | 168,265,141 |   |                                   | 362,421,154 |   |                     | 572,330,678 |   |                                     | 377,150,584 |   |                       | 231,918,925 |
| **LIABILITIES:**                                                                            |                                                                           |
| Payables:                                                                                   |                                                                           |
|                                                                                        | Investment securities purchased                                                |   |                       | –     |   |                           | –     |   |                                   | –     |   |                     | 1,487,891   |   |                                     | –     |   |                       | – |
|                                                                                        | Capital stock redeemed                                                         |   |                       | 907,814     |   |                           | 574,210     |   |                                   | 440,739     |   |                     | 825,785     |   |                                     | 815,493     |   |                       | 2,838,963 |
|                                                                                        | Distributions payable                                                          |   |                       | –     |   |                           | 116,466     |   |                                   | 1,874       |   |                     | –     |   |                                     | –     |   |                       | – |
| Accrued distribution and service plan fees                                                  |                                                                           |   | 271,891                    |        |   | 106,590                        |        |   | –                                |        |   | 277,915                  |        |   | 194,589                                  |        |   | 119,490                    |
| Accrued management fees                                                                     |                                                                           |   | 294,951                    |        |   | 45,808                         |        |   | 103,479                                |        |   | 354,500                  |        |   | 246,202                                  |        |   | 160,806                    |
| Accrued transfer agent fees                                                                 |                                                                           |   | 199,049                    |        |   | 32,994                         |        |   | 37,515                                 |        |   | 167,079                  |        |   | 94,631                                   |        |   | 122,710                    |
| Other accrued expenses                                                                      |                                                                           |   | 88,145                     |        |   | 72,300                         |        |   | 111,995                                |        |   | 62,065                   |        |   | 74,615                                   |        |   | 26,460                     |
|                                                                                        | Total liabilities                                                              |   |                       | 1,761,850   |   |                           | 948,368     |   |                                   | 695,602     |   |                     | 3,175,235   |   |                                     | 1,425,530   |   |                       | 3,268,429 |
| **NET ASSETS**                                                                              |                                                                           | $      | 461,059,971                |        | $      | 167,316,773                    |        | $      | 361,725,552                            |        | $      | 569,155,443              |        | $      | 375,725,054                              |        | $      | 228,650,496                |
| **NET ASSETS CONSIST OF:**                                                                  |                                                                           |
| Par value of shares of capital stock                                                        |                                                                           | $      | 291,604                    |        | $      | 295,650                        |        | $      | 3,617,256                              |        | $      | 255,506                  |        | $      | 196,340                                  |        | $      | 160,858                    |
| Additional paid-in capital                                                                  |                                                                           |   | 658,185,144                |        |   | 169,880,238                    |        |   | 358,108,296                            |        |   | 561,717,881              |        |   | 615,168,683                              |        |   | 467,727,681                |
| Undistributed net investment income                                                         |                                                                           |   | 883,732                    |        |   | –                        |        |   | –                                |        |   | 2,727,327                |        |   | 2,787,373                                |        |   | 2,996,219                  |
| Accumulated net realized losses from investments and foreign currency transactions          |                                                                           |   | (165,628,678)              |        |   | (4,560,109)                    |        |   | –                                |        |   | (56,812,345)             |        |   | (74,670,154)                             |        |   | (159,005,734)              |
| Net unrealized appreciation (depreciation) on investments and foreign currency transactions |                                                                           |   | (32,671,831)               |        |   | 1,700,994                      |        |   | –                                |        |   | 61,267,074               |        |   | (167,757,188)                            |        |   | (83,228,528)               |
|                                                                                        | Net Assets                                                                     |   | $                          | 461,059,971 |   | $                              | 167,316,773 |   | $                                      | 361,725,552 |   | $                        | 569,155,443 |   | $                                        | 375,725,054 |   | $                          | 228,650,496 |
|                                                                                        |                                                                           |
| *Including:                                                                                 |                                                                           |
|                                                                                        | Cost of unaffiliated companies                                                 |   | $                          | 486,042,168 |   | $                              | 165,388,418 |   | $                                      | 335,242,688 |   | $                        | 509,072,405 |   | $                                        | 542,968,986 |   | $                          | 309,201,537 |
|                                                                                        | Cost of affiliated companies                                                   |   |                       | 7,709,292   |   |                           | –     |   |                                   | –     |   |                     | –     |   |                                     | –     |   |                       | – |
|                                                                                        | Cost and market value of repurchase agreements (if greater than 10% of assets) |   |                       | –     |   |                           | –     |   |                                   | 95,336,000  |   |                     | –     |   |                                     | –     |   |                       | – |
| **Cost of cash - foreign currencies                                                         |                                                                           |   | 389,473                    |        |   | –                        |        |   | –                                |        |   | –                  |        |   | –                                  |        |   | –                    |
|                                                                                        |                                                                           |
|                                                                                             |                                                                                |        |                            |             |        |                                |             |        |                                        |             |        |                          |             |        |                                          |             |        |                            |  |  |  |

 

 

39

 

 

----

**DAVIS SERIES,            INC.**                                                                      **Statements            of Assets and Liabilities – (Continued)**

|   | **At June 30, 2009*****(Unaudited)*** |
|--------|---------------------------------------|

 

|                                                                     |                                                                                                                             |   |                       |        |   |                           |        |   |                                   |        |   |                     |        |   |                                     |        |   |                       |        |
|--------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------------|-------------|--------|----------------------------------------|-------------|--------|--------------------------|-------------|--------|------------------------------------------|-------------|--------|----------------------------|-------------|
|                                                                     |                                                                                                                             |   | **Davis Opportunity Fund** |        |   | **Davis Government Bond Fund** |        |   | **Davis Government Money Market Fund** |        |   | **Davis Financial Fund** |        |   | **Davis Appreciation & Income Fund** |        |   | **Davis Real Estate Fund** |        |
| **CLASS A SHARES:**                                                      |                                                                                                                             |
|                                                                     | Net assets                                                                                                                       |   | $                          | 268,516,434 |   | $                              | 103,157,516 |   | $                                      | 306,079,957 |   | $                        | 482,955,136 |   | $                                        | 236,117,559 |   | $                          | 178,221,530 |   |
|                                                                     | Shares outstanding                                                                                                               |   |                       | 16,463,506  |   |                           | 18,225,404  |   |                                   | 306,079,957 |   |                     | 21,314,995  |   |                                     | 12,346,019  |   |                       | 12,548,933  |   |
|                                                                     | Net asset value and redemption 

   price per share (Net assets ÷ 

  Shares outstanding)             |   | $                          | 16.31       |   | $                              | 5.66        |   | $                                      | 1.00        |   | $                        | 22.66       |   | $                                        | 19.12       |   | $                          | 14.20       |   |
|                                                                     | Maximum offering price per share (100/95.25 of net asset value)†                                                          |   | $                          | 17.12       |   | $                              | 5.94        |   | $                                      | N/A         |   | $                        | 23.79       |   | $                                        | 20.07       |   | $                          | 14.91       |   |
| **CLASS B SHARES:**                                                      |                                                                                                                             |
|                                                                     | Net assets                                                                                                                       |   | $                          | 20,902,686  |   | $                              | 17,863,296  |   | $                                      | 29,305,786  |   | $                        | 13,028,981  |   | $                                        | 17,323,101  |   | $                          | 5,586,019   |   |
|                                                                     | Shares outstanding                                                                                                               |   |                       | 1,494,708   |   |                           | 3,165,069   |   |                                   | 29,305,786  |   |                     | 664,591     |   |                                     | 917,676     |   |                       | 398,306     |   |
|                                                                     | Net asset value, offering, and 

   redemption price per share (Net 

   assets ÷ Shares outstanding) |   | $                          | 13.98       |   | $                              | 5.64        |   | $                                      | 1.00        |   | $                        | 19.60       |   | $                                        | 18.88       |   | $                          | 14.02       |   |
| **CLASS C SHARES:**                                                      |                                                                                                                             |
|                                                                     | Net assets                                                                                                                       |   | $                          | 116,377,634 |   | $                              | 44,615,188  |   | $                                      | 26,233,665  |   | $                        | 62,851,386  |   | $                                        | 77,865,632  |   | $                          | 23,292,780  |   |
|                                                                     | Shares outstanding                                                                                                               |   |                       | 7,913,090   |   |                           | 7,879,737   |   |                                   | 26,233,665  |   |                     | 3,125,709   |   |                                     | 4,059,502   |   |                       | 1,639,649   |   |
|                                                                     | Net asset value, offering, and 

   redemption price per share (Net 

   assets ÷ Shares outstanding) |   | $                          | 14.71       |   | $                              | 5.66        |   | $                                      | 1.00        |   | $                        | 20.11       |   | $                                        | 19.18       |   | $                          | 14.21       |   |
| **CLASS Y SHARES:**                                                      |                                                                                                                             |
|                                                                     | Net assets                                                                                                                       |   | $                          | 55,263,217  |   | $                              | 1,680,773   |   | $                                      | 106,144     |   | $                        | 10,319,940  |   | $                                        | 44,418,762  |   | $                          | 21,550,167  |   |
|                                                                     | Shares outstanding                                                                                                               |   |                       | 3,289,104   |   |                           | 294,770     |   |                                   | 106,144     |   |                     | 445,346     |   |                                     | 2,310,833   |   |                       | 1,498,933   |   |
|                                                                     | Net asset value, offering, and 

   redemption price per share (Net 

   assets ÷ Shares outstanding) |   | $                          | 16.80       |   | $                              | 5.70        |   | $                                      | 1.00        |   | $                        | 23.17       |   | $                                        | 19.22       |   | $                          | 14.38       |   |
|                                                                     |                                                                                                                             |
| †On purchases of $100,000 or more, the offering price is reduced. |                                                                                                                             |
|                                                                     |                                                                                                                             |
| ***See Notes to Financial Statements***                                  |
|                                                                          |                                                                                                                                  |        |                            |             |        |                                |             |        |                                        |             |        |                          |             |        |                                          |             |        |                            |             |  |  |

 

 

40

 

 

----

**DAVIS SERIES,            INC.**                                                                                                                  **Statements of Operations**

|   | **For the six months ended June 30, 2009*****(Unaudited)*** |
|--------|-------------------------------------------------------------|

 

 

|                                                                                        |                                                                        | **Davis Opportunity Fund** |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |      | **Davis Financial Fund** |    | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |         |
|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|----------------------------|-------------|--------------------------------|--------|----------------------------------------|-----------|--------------------------|---------|------------------------------------------|--------|----------------------------|--------------|
| **INVESTMENT INCOME:**                                                                      |                                                                        |
| Income:                                                                                     |                                                                        |
|                                                                                        | Dividends:                                                                  |                       |
|                                                                                        | Unaffiliated companies*                                                     |                       | $           | 4,018,997                      |   | $                                      | –   |                     | $       | –                                  |   | $                          | 5,319,923    |   | $ | 3,296,127 |   | $ | 5,345,560 |   |
|                                                                                        | Affiliated companies                                                        |                       |        | –                        |   |                                   | –   |                     |    | –                                  |   |                       | –      |   |   | – |   |   | 550,281 |   |
|                                                                                        | Interest                                                                    |                       |        | 291,613                        |   |                                   | 3,271,523 |                     |    | 1,955,480                                |   |                       | 5,138        |   |   | 3,237,393 |   |   | 175,843 |   |
|                                                                                        | Total income                                                                |                       |        | 4,310,610                      |   |                                   | 3,271,523 |                     |    | 1,955,480                                |   |                       | 5,325,061    |   |   | 6,533,520 |   |   | 6,071,684 |   |
|                                                                                        |                                                                        |
| Expenses:                                                                                   |                                                                        |
|                                                                                        | Management fees (Note 3)                                                    |                       |        | 1,488,081                      |   |                                   | 246,247   |                     |    | 890,453                                  |   |                       | 1,698,762    |   |   | 1,257,267 |   |   | 820,199 |   |
|                                                                                        | Custodian fees                                                              |                       |        | 38,048                         |   |                                   | 25,719    |                     |    | 25,129                                   |   |                       | 40,749       |   |   | 42,639 |   |   | 25,415 |   |
|                                                                                        | Transfer agent fees:                                                        |                       |
|                                                                                        | Class A                                                                     |                       |        | 307,616                        |   |                                   | 52,188    |                     |    | 105,883                                  |   |                       | 370,722      |   |   | 166,983 |   |   | 313,851 |   |
|                                                                                        | Class B                                                                     |                       |        | 45,813                         |   |                                   | 18,784    |                     |    | 10,855                                   |   |                       | 36,718       |   |   | 24,789 |   |   | 22,501 |   |
|                                                                                        | Class C                                                                     |                       |        | 156,612                        |   |                                   | 30,913    |                     |    | 10,903                                   |   |                       | 81,841       |   |   | 69,837 |   |   | 53,380 |   |
|                                                                                        | Class Y                                                                     |                       |        | 22,832                         |   |                                   | 2,634     |                     |    | 45                                       |   |                       | 12,278       |   |   | 15,992 |   |   | 22,862 |   |
|                                                                                        | Audit fees                                                                  |                       |        | 10,800                         |   |                                   | 9,000     |                     |    | 10,800                                   |   |                       | 16,800       |   |   | 11,400 |   |   | 15,000 |   |
|                                                                                        | Legal fees                                                                  |                       |        | 7,650                          |   |                                   | 2,950     |                     |    | 6,354                                    |   |                       | 8,965        |   |   | 6,248 |   |   | 3,937 |   |
|                                                                                        | Accounting fees (Note 3)                                                    |                       |        | 5,502                          |   |                                   | 1,500     |                     |    | 4,002                                    |   |                       | 4,002        |   |   | 4,998 |   |   | 3,498 |   |
|                                                                                        | Reports to shareholders                                                     |                       |        | 75,000                         |   |                                   | 25,000    |                     |    | 36,503                                   |   |                       | 85,005       |   |   | 60,001 |   |   | 80,000 |   |
|                                                                                        | Directors’ fees and expenses                                          |                       |        | 30,716                         |   |                                   | 12,614    |                     |    | 26,066                                   |   |                       | 36,670       |   |   | 25,487 |   |   | 14,920 |   |
|                                                                                        | Registration and filing fees                                                |                       |        | 37,500                         |   |                                   | 32,500    |                     |    | 33,992                                   |   |                       | 45,068       |   |   | 45,501 |   |   | 32,500 |   |
|                                                                                        | Interest expense                                                            |                       |        | –                        |   |                                   | –   |                     |    | –                                  |   |                       | 2,763        |   |   | – |   |   | – |   |
|                                                                                        | Miscellaneous                                                               |                       |        | 12,464                         |   |                                   | 5,733     |                     |    | 6,787                                    |   |                       | 12,175       |   |   | 12,290 |   |   | 18,585 |   |
|                                                                                        | Payments under distribution                                                 |                       |
|                                                                                        | plan (Note 7):                                                              |                       |        |                           |   |                                   |      |                     |    |                                     |   |                       |         |   |   |   |   |   |   |   |
|                                                                                        | Class A                                                                     |                       |        | 285,548                        |   |                                   | 94,036    |                     |    | –                                  |   |                       | 405,266      |   |   | 216,526 |   |   | 199,861 |   |
|                                                                                        | Class B                                                                     |                       |        | 99,287                         |   |                                   | 88,601    |                     |    | –                                  |   |                       | 61,038       |   |   | 80,038 |   |   | 28,181 |   |
|                                                                                        | Class C                                                                     |                       |        | 541,197                        |   |                                   | 215,871   |                     |    | –                                  |   |                       | 273,274      |   |   | 363,643 |   |   | 113,519 |   |
|                                                                                        | Total expenses                                                              |                       |        | 3,164,666                      |   |                                   | 864,290   |                     |    | 1,167,772                                |   |                       | 3,192,096    |   |   | 2,403,639 |   |   | 1,768,209 |   |
|                                                                                        | Expenses paid indirectly (Note 4)                                           |                       |        | –                        |   |                                   | –   |                     |    | –                                  |   |                       | (2)          |   |   | – |   |   | (1) |   |
|                                                                                        | Waiver of expenses by Adviser (Note 3)                                      |                       |        | –                        |   |                                   | –   |                     |    | (110,429)                                |   |                       | –      |   |   | – |   |   | – |   |   |
|                                                                                        | Net expenses                                                                |                       |        | 3,164,666                      |   |                                   | 864,290   |                     |    | 1,057,343                                |   |                       | 3,192,094    |   |   | 2,403,639 |   |   | 1,768,208 |   |
|                                                                                        | Net investment income                                                       |                       |        | 1,145,944                      |   |                                   | 2,407,233 |                     |    | 898,137                                  |   |                       | 2,132,967    |   |   | 4,129,881 |   |   | 4,303,476 |   |
|                                                                                        |                                                                        |
| **REALIZED & UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:** |                                                                        |
| Net realized gain (loss) from:                                                              |                                                                        |
|                                                                                        | Investment transactions:                                                    |                       |
|                                                                                        | Unaffiliated companies                                                      |                       |        | (49,304,818)                   |   |                                   | (109,335) |                     |    | –                                  |   |                       | (48,426,287) |   |   | (69,839,279) |   |   | (144,888,357) |   |
|                                                                                        | Affiliated companies                                                        |                       |        | –                        |   |                                   | –   |                     |    | –                                  |   |                       | –      |   |   | – |   |   | (4,453,708) |   |
|                                                                                        | Foreign currency transactions                                               |                       |        | 2,402                          |   |                                   | –   |                     |    | –                                  |   |                       | (14,417)     |   |   | – |   |   | (25,327) |   |
| Net change in unrealized appreciation (depreciation)                                        |                                                                        |                       | 114,524,465 |                           |   | 311,073                                |      |                     | – |                                     |   | 116,532,192                |         |   | 123,979,200 |   |   | 124,838,872 |   |
|                                                                                        | Net realized and unrealized gain (loss) on investments and foreign currency |                       |        | 65,222,049                     |   |                                   | 201,738   |                     |    | –                                  |   |                       | 68,091,488   |   |   | 54,139,921 |   |   | (24,528,520) |   |
|                                                                                        | Net increase (decrease) in net assets resulting from operations             |                       | $           | 66,367,993                     |   | $                                      | 2,608,971 |                     | $       | 898,137                                  |   | $                          | 70,224,455   |   | $ | 58,269,802 |   | $ | (20,225,044) |   |
|                                                                                        |                                                                        |
| *Net of foreign taxes withheld as follows                                                   |                                                                        | $                          | 245,348     |                           | $      | –                                |      | $                        | – |                                     | $      | 107,408                    |         | $ | – |   | $ | 18,406 |   |
|                                                                                        |                                                                        |
| ***See Notes to Financial Statements***                                                     |
|                                                                                             |                                                                             |                            |             |                                |        |                                        |           |                          |         |                                          |        |                            |              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

41

 

 

----

**DAVIS SERIES,            INC.**                                                                                            **Statements of Changes in Net Assets**

|   | **For the six months ended June 30, 2009*****(Unaudited)*** |
|--------|-------------------------------------------------------------|

 

 

|                                                  |                                                                                       | **Davis Opportunity Fund** |       | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |        | **Davis Financial Fund** |         | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |         |
|-------------------------------------------------------|--------------------------------------------------------------------------------------------|----------------------------|------------|--------------------------------|--------|----------------------------------------|-------------|--------------------------|--------------|------------------------------------------|--------|----------------------------|--------------|
| **OPERATIONS:**                                       |                                                                                       |
|                                                  | Net investment income                                                                      |                       | $          | 1,145,944                      |   | $                                      | 2,407,233   |                     | $            | 898,137                                  |   | $                          | 2,132,967    |   | $ | 4,129,881 |   | $ | 4,303,476 |   |
|                                                  | Net realized losses from investments and foreign currency transactions                     |                       |       | (49,302,416)                   |   |                                   | (109,335)   |                     |         | –                                  |   |                       | (48,440,704) |   |   | (69,839,279) |   |   | (149,367,392) |   |
|                                                  | Net change in appreciation (depreciation) on investments and foreign currency transactions |                       |       | 114,524,465                    |   |                                   | 311,073     |                     |         | –                                  |   |                       | 116,532,192  |   |   | 123,979,200 |   |   | 124,838,872 |   |
|                                                  | Net increase (decrease) in net assets resulting from operations                            |                       |       | 66,367,993                     |   |                                   | 2,608,971   |                     |         | 898,137                                  |   |                       | 70,224,455   |   |   | 58,269,802 |   |   | (20,225,044) |   |
|                                                  |                                                                                       |
| **DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:** |                                                                                       |
|                                                  | Net investment income:                                                                     |                       |
|                                                  | Class A                                                                                    |                       |       | –                        |   |                                   | (1,630,657) |                     |         | (747,204)                                |   |                       | –      |   |   | (1,037,395) |   |   | (1,023,413) |   |
|                                                  | Class B                                                                                    |                       |       | –                        |   |                                   | (209,451)   |                     |         | (75,115)                                 |   |                       | –      |   |   | (41,737) |   |   | (20,276) |   |
|                                                  | Class C                                                                                    |                       |       | –                        |   |                                   | (521,035)   |                     |         | (75,471)                                 |   |                       | –      |   |   | (210,507) |   |   | (96,370) |   |
|                                                  | Class Y                                                                                    |                       |       | –                        |   |                                   | (46,090)    |                     |         | (347)                                    |   |                       | –      |   |   | (218,015) |   |   | (150,287) |   |
|                                                  |                                                                                       |
| **CAPITAL SHARE TRANSACTIONS:**                       |                                                                                       |
|                                                  | Net increase (decrease) in net assets resulting from capital share transactions (Note 5):  |                       |
|                                                  | Class A                                                                                    |                       |       | (36,774,822)                   |   |                                   | 11,185,981  |                     |         | (24,952,757)                             |   |                       | (3,452,066)  |   |   | (28,318,014) |   |   | (8,534,718) |   |
|                                                  | Class B                                                                                    |                       |       | (3,994,180)                    |   |                                   | 1,397,129   |                     |         | (2,609,861)                              |   |                       | (2,589,372)  |   |   | (2,208,104) |   |   | (1,289,575) |   |
|                                                  | Class C                                                                                    |                       |       | (19,527,227)                   |   |                                   | 5,298,835   |                     |         | (5,879,908)                              |   |                       | (2,837,799)  |   |   | (13,437,395) |   |   | (2,917,621) |   |
|                                                  | Class Y                                                                                    |                       |       | 4,717,224                      |   |                                   | 52,726      |                     |         | (42,909)                                 |   |                       | 288,351      |   |   | (10,917,005) |   |   | (5,621,905) |   |
| Total increase (decrease) in net assets               |                                                                                       |                       | 10,788,988 |                           |   | 18,136,409                             |        |                     | (33,485,435) |                                     |   | 61,633,569                 |         |   | 1,881,630 |   |   | (39,879,209) |   |
|                                                  |                                                                                       |
| **NET ASSETS:**                                       |                                                                                       |
|                                                  | Beginning of period                                                                        |                       |       | 450,270,983                    |   |                                   | 149,180,364 |                     |         | 395,210,987                              |   |                       | 507,521,874  |   |   | 373,843,424 |   |   | 268,529,705 |   |
|                                                  | End of period*                                                                             |                       | $          | 461,059,971                    |   | $                                      | 167,316,773 |                     | $            | 361,725,552                              |   | $                          | 569,155,443  |   | $ | 375,725,054 |   | $ | 228,650,496 |   |
|                                                  |                                                                                       |
| *Including undistributed net investment income of     |                                                                                       | $                          | 883,732    |                           | $      | –                                |        | $                        | –      |                                     | $      | 2,727,327                  |         | $ | 2,787,373 |   | $ | 2,996,219 |   |
|                                                  |                                                                                       |
| ***See Notes to Financial Statements***               |
|                                                       |                                                                                            |                            |            |                                |        |                                        |             |                          |              |                                          |        |                            |              |  |  |  |  |  |  |  |  |  |

 

 

42

 

 

----

**DAVIS SERIES,            INC.**                                                                                            **Statements of Changes in Net Assets**

|   | **For the year ended December 31, 2008** |
|--------|------------------------------------------|

 

 

|                                                                |                                                                                                  | **Davis Opportunity Fund** |          | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |        | ****Davis Financial Fund**** |          | **Davis Appreciation & Income Fund** |   | ****Davis Real Estate Fund**** |
|---------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|----------------------------|---------------|--------------------------------|--------|----------------------------------------|-------------|------------------------------|---------------|------------------------------------------|--------|--------------------------------|
| **OPERATIONS:**                                                     |                                                                                                  |
|                                                                | Net investment income                                                                                 |                       | $             | 1,860,935                      |   | $                                      | 2,759,425   |                         | $             | 11,283,676                               |   | $                              | 2,769,600 |   | $ | 13,783,464 |   | $ | 7,609,460 |
|                                                                | Net realized gain (loss) from investments and foreign currency transactions                           |                       |          | (98,665,523)                   |   |                                   | 266,942     |                         |          | –                                  |   |                           | (8,321,996) |   |   | (2,481,552) |   |   | (16,955,861) |
|                                                                | Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions |                       |          | (322,839,932)                  |   |                                   | 924,030     |                         |          | –                                  |   |                           | (434,667,201) |   |   | (320,576,140) |   |   | (255,911,728) |
|                                                                | Net increase (decrease) in net assets resulting from operations                                       |                       |          | (419,644,520)                  |   |                                   | 3,950,397   |                         |          | 11,283,676                               |   |                           | (440,219,597) |   |   | (309,274,228) |   |   | (265,258,129) |
|                                                                |                                                                                                  |
| **DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:**               |                                                                                                  |
|                                                                | Net investment income:                                                                                |                       |
|                                                                | Class A                                                                                               |                       |          | –                        |   |                                   | (1,772,333) |                         |          | (10,253,371)                             |   |                           | (3,090,586) |   |   | (9,255,862) |   |   | (1,255,582) |
|                                                                | Class B                                                                                               |                       |          | –                        |   |                                   | (375,503)   |                         |          | (608,705)                                |   |                           | – |   |   | (416,018) |   |   | (29,482) |
|                                                                | Class C                                                                                               |                       |          | –                        |   |                                   | (673,420)   |                         |          | (418,899)                                |   |                           | – |   |   | (1,901,373) |   |   | (115,912) |
|                                                                | Class Y                                                                                               |                       |          | –                        |   |                                   | (29,328)    |                         |          | (2,701)                                  |   |                           | (80,009) |   |   | (1,997,373) |   |   | (196,252) |
|                                                                | Realized gains from investment transactions:                                                          |                       |
|                                                                | Class A                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | (39,368,129) |   |   | – |   |   | (6,702,307) |
|                                                                | Class B                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | (1,521,457) |   |   | – |   |   | (253,781) |
|                                                                | Class C                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | (5,830,612) |   |   | – |   |   | (988,259) |
|                                                                | Class Y                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | (788,404) |   |   | – |   |   | (911,087) |
|                                                                | Return of capital:                                                                                    |                       |
|                                                                | Class A                                                                                               |                       |          | (118,578)                      |   |                                   | –     |                         |          | –                                  |   |                           | – |   |   | – |   |   | (4,742,665) |
|                                                                | Class B                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | – |   |   | – |   |   | (111,363) |
|                                                                | Class C                                                                                               |                       |          | –                        |   |                                   | –     |                         |          | –                                  |   |                           | – |   |   | – |   |   | (437,832) |
|                                                                | Class Y                                                                                               |                       |          | (196,448)                      |   |                                   | –     |                         |          | –                                  |   |                           | – |   |   | – |   |   | (741,294) |
|                                                                |                                                                                                  |
| **CAPITAL SHARE TRANSACTIONS:**                                     |                                                                                                  |
|                                                                | Net increase (decrease) in net assets resulting from capital share transactions (Note 5):             |                       |
|                                                                | Class A                                                                                               |                       |          | (157,164,375)                  |   |                                   | 63,904,783  |                         |          | (227,850,483)                            |   |                           | 97,276,571 |   |   | (137,197,977) |   |   | (47,554,620) |
|                                                                | Class B                                                                                               |                       |          | (16,586,730)                   |   |                                   | 5,931,908   |                         |          | 7,499,297                                |   |                           | (17,969,985) |   |   | (12,486,997) |   |   | (8,560,035) |
|                                                                | Class C                                                                                               |                       |          | (57,227,835)                   |   |                                   | 24,245,470  |                         |          | 19,121,318                               |   |                           | 24,998,932 |   |   | (25,991,618) |   |   | (12,434,625) |
|                                                                | Class Y                                                                                               |                       |          | (1,762,606)                    |   |                                   | 1,209,297   |                         |          | (5,152)                                  |   |                           | 7,478,186 |   |   | (14,246,313) |   |   | 1,719,014 |
| Total increase (decrease) in net assets                             |                                                                                                  |                       | (652,701,092) |                           |   | 96,391,271                             |        |                         | (201,235,020) |                                     |   | (379,115,090)                  |   |   | (512,767,759) |   |   | (348,574,211) |
|                                                                |                                                                                                  |
| **NET ASSETS:**                                                     |                                                                                                  |
|                                                                | Beginning of year                                                                                     |                       |          | 1,102,972,075                  |   |                                   | 52,789,093  |                         |          | 596,446,007                              |   |                           | 886,636,964 |   |   | 886,611,183 |   |   | 617,103,916 |
|                                                                | End of year*                                                                                          |                       | $             | 450,270,983                    |   | $                                      | 149,180,364 |                         | $             | 395,210,987                              |   | $                              | 507,521,874 |   | $ | 373,843,424 |   | $ | 268,529,705 |
|                                                                |                                                                                                  |
| *Including undistributed (overdistributed) net investment income of |                                                                                                  | $                          | (262,212)     |                           | $      | –                                |        | $                            | –       |                                     | $      | 594,360                        |   | $ | 165,146 |   | $ | (16,911) |
|                                                                     |                                                                                                       |                            |               |                                |        |                                        |             |                              |               |                                          |        |                                |  |  |  |  |  |  |  |  |  |  |

 

 

43

 

 

----

**DAVIS SERIES,            INC.**                                                                                                         **Notes to Financial Statements**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

Davis Series, Inc. (a Maryland corporation) (“Company”), is registered under the Investment Company Act of 1940 (“40 Act”) as amended, as an open-end management investment company. Davis Opportunity Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Financial Fund, and Davis Appreciation & Income Fund are diversified under the 40 Act. Davis Real            Estate Fund is non-diversified under the 40 Act. The Company operates as a series issuing shares of common stock in the following six funds (collectively “Funds”):

 

**Davis Opportunity Fund**seeks to achieve long-term growth of capital. It invests primarily in common stocks and other equity securities, and may invest in both domestic and foreign issuers. 

 

**Davis Government Bond Fund**seeks to achieve current income. It invests in debt securities which are obligations of, or which are guaranteed by, the U.S. Government, its agencies or instrumentalities. 

 

**Davis Government Money Market Fund**seeks to achieve as high a level of current income as is consistent with the principle of preservation of capital and maintenance of liquidity. It invests in debt securities issued or guaranteed by the U.S. Government, its agencies or instrumentalities and repurchase agreements involving such securities. There is no assurance that the            Fund will be able to maintain a stable net asset value of $1.00 per share. 

 

**Davis Financial Fund**seeks to achieve long-term growth of capital. It invests primarily in common stocks and other equity securities, and will concentrate investments in companies principally engaged in the banking, insurance, and financial service industries.

 

**Davis Appreciation & Income Fund**seeks to achieve total return through a combination of growth and income. Under normal circumstances, the Fund invests in a diversified portfolio of convertible securities, common and preferred stock, and fixed income securities. It may invest in lower rated bonds commonly known as “junk bonds”.

 

**Davis Real Estate Fund**seeks to achieve total return through a combination of growth and income. It invests primarily in securities of companies principally engaged in or related to the real estate industry or which own significant real estate assets or which primarily invest in real estate financial instruments.

 

Because of the risk inherent in any investment program, the Company cannot ensure that the investment objective of any of its series will be achieved.

 

The Company accounts separately for the assets, liabilities, and operations of each Fund. Each Fund offers shares in four classes, Class A, Class B, Class C, and Class Y. Class A shares are sold with a front-end sales charge, except for shares of the Davis Government Money Market Fund, which are sold at net asset value. Class B and C shares are sold at net asset value and may be subject to a            contingent deferred sales charge upon redemption. Class Y shares are sold at net asset value and are not subject to any contingent deferred sales charge. Class Y shares are only available to certain qualified investors. Income, expenses (other than those attributable to a specific class), and gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets represented by each class. Operating expenses directly attributable to a specific            class, such as distribution and transfer agent fees, are charged against the operations of that class. All classes have identical rights with respect to voting (exclusive of each Class’ distribution arrangement), liquidation, and distributions. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. 

 

44

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)**

 

***Security Valuation***- The Funds calculate the net asset value of their shares as of the close of the New York Stock Exchange (“Exchange”), normally 4:00 P.M. Eastern time, on each day the Exchange is open for business. Securities listed on the Exchange (and other national exchanges) are valued at the last reported sales price on the day of valuation.            Securities traded in the over-the-counter market (e.g. NASDAQ) and listed securities for which no sale was reported on that date are stated at the average of closing bid and asked prices. Securities traded on foreign exchanges are valued based upon the last sales price on the principal exchange on which the security is traded prior to the time when the Funds’ assets are valued. Securities (including restricted securities) for which market quotations are not readily available            are valued at their fair value. Securities whose values have been materially affected by what Davis Selected Advisers, L.P. (“Davis Advisors” or “Adviser”), the Funds’ investment adviser, identifies as a significant event occurring before the Funds’ assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board            of Directors. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days, are valued at market value. For Davis Government Money Market Fund, in compliance with Rule 2a-7 of the 40 Act, securities are valued at amortized cost, which approximates market value. These valuation procedures are reviewed and subject to approval by the            Board of Directors.

 

**Fair Value Measurements**- The Funds adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), effective January 1, 2008. In accordance with FAS 157, fair value is defined as the price that the Funds would receive upon selling an investment in an orderly transaction            to an independent buyer in the principal or most advantageous market of the investment. FAS 157 established a three-tier hierarchy for measuring fair value of assets and liabilities. The three-tier hierarchy of inputs is summarized in the three broad levels listed below. 

 

|   | Level 1 – | quoted prices in active markets for identical securities |
|--------|-----------------|----------------------------------------------------------|

|   | Level 2 – | other significant observable inputs (including quoted prices for similar investments, interest rates |
|--------|-----------------|------------------------------------------------------------------------------------------------------|

|   | prepayment speeds, credit risk, etc.) |
|--------|---------------------------------------|

|   | Level 3 – | significant unobservable inputs (including Fund’s own assumptions in determining the fair value 

of investments) |
|--------|-----------------|-------------------------------------------------------------------------------------------------------------------------|

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Money market securities are valued using amortized cost, in accordance with rules under the 40 Act. Generally, amortized cost approximates the current fair value of a security, but since the value is not obtained from a quoted price in an active market,            such securities are reflected as Level 2.

 

45

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)**

 

**Fair Value Measurements****– (Continued)**

 

The following is a summary of the inputs used as of June 30, 2009 in valuing each Fund’s investments carried at value:

 

|                                                                                    | **Investments in Securities at Value** |        |
|-----------------------------------------------------------------------------------------|----------------------------------------|-------------|
|                                                                                    | **Davis Opportunity Fund**             |        | **Davis Government Bond Fund** |   | ****Davis Government Money Market Fund**** |   | **Davis Financial Fund** |   | ****Davis Appreciation & Income Fund**** |   | **Davis Real Estate Fund** |   |
| Valuation inputs                                                                        |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Level 1 – Quoted prices:**                                                      |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities:                                                                      |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer discretionary                                                                  | $                                      | 89,252,237  |   | $ | – |   | $ | – |   | $ | 6,928,183 |   | $ | 27,480,117 |   | $ | – |   |
| Consumer staples                                                                        |                                   | 4,561,323   |   |   | – |   |   | – |   |   | – |   |   | 37,312,810 |   |   | – |   |
| Energy                                                                                  |                                   | 32,517,664  |   |   | – |   |   | – |   |   | 28,349,849 |   |   | 19,289,260 |   |   | – |   |
| Financials                                                                              |                                   | 51,040,763  |   |   | – |   |   | – |   |   | 466,395,089 |   |   | 42,719,863 |   |   | 177,849,569 |   |
| Health care                                                                             |                                   | 83,518,089  |   |   | – |   |   | – |   |   | – |   |   | 7,840,425 |   |   | – |   |
| Industrials                                                                             |                                   | 38,592,920  |   |   | – |   |   | – |   |   | 19,705,606 |   |   | 38,631,744 |   |   | 16,792,946 |   |
| Information technology                                                                  |                                   | 99,458,565  |   |   | – |   |   | – |   |   | – |   |   | 12,717,598 |   |   | – |   |
| Materials                                                                               |                                   | 27,370,291  |   |   | – |   |   | – |   |   | 16,937,100 |   |   | 12,929,750 |   |   | – |   |
| Telecommunication services                                                              |                                   | 850,995     |   |   | – |   |   | – |   |   | – |   |   | – |   |   | – |   |
| Utilities                                                                               |                                   | 2,040,716   |   |   | – |   |   | – |   |   | – |   |   | 19,160,757 |   |   | – |   |
| **Level 2 – Other Significant**                                                   |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Observable Inputs:**                                                                  |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt securities issued by U.S. Treasuries and U.S. government corporations and agencies |                                   | –     |   |   | 157,536,412 |   |   | 239,906,688 |   |   | – |   |   | – |   |   | – |   |
| Convertible debt securities                                                             |                                   | 5,397,000   |   |   | – |   |   | – |   |   | – |   |   | 126,726,317 |   |   | 10,391,966 |   |
| Corporate debt securities                                                               |                                   | –     |   |   | – |   |   | – |   |   | – |   |   | 13,014,168 |   |   | – |   |
| Equity securities:                                                                      |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financials                                                                              |                                   | 14,861,875  |   |   | – |   |   | – |   |   | 23,693,000 |   |   | 7,751,279 |   |   | 8,087,746 |   |
| Industrials                                                                             |                                   | –     |   |   | – |   |   | – |   |   | – |   |   | 4,272,710 |   |   | – |   |
| Short-term securities                                                                   |                                   | 11,613,000  |   |   | 9,553,000 |   |   | 95,336,000 |   |   | 8,313,000 |   |   | 5,365,000 |   |   | 12,854,000 |   |
| **Level 3 – Significant Unobservable**                                            |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Inputs:**                                                                             |                                   | –     |   |   | – |   |   | – |   |   | – |   |   | – |   |   | – |   |
| **Total**                                                                               | $                                      | 461,075,438 |   | $ | 167,089,412 |   | $ | 335,242,688 |   | $ | 570,321,827 |   | $ | 375,211,798 |   | $ | 225,976,227 |   |
|                                                                                    |                                   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

 

***Master Repurchase Agreements***- The Funds, along with other affiliated funds, may transfer uninvested cash balances into one or more master repurchase agreement accounts. These balances are invested in one or more repurchase agreements, secured by U.S. Government securities. A custodian bank holds securities pledged as collateral for repurchase agreements until the            agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings.

 

***Currency Translation***- The market values of all assets and liabilities denominated in foreign currencies are recorded in the financial statements after translation to the U.S. Dollar based upon the mean between the bid and offered quotations of the currencies against U.S. Dollars on the date of valuation. The cost basis of such assets and liabilities is determined            based upon historical exchange rates. Income and expenses are translated at average exchange rates in effect as accrued or incurred.

 

46

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)**

 

***Foreign Currency***- The Funds may enter into forward purchases or sales of foreign currencies to hedge certain foreign currency denominated assets and liabilities against declines in market value relative to the U.S. Dollar. Forward currency contracts are marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When            the forward currency contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the forward currency contract at the time it was opened and value at the time it was closed. Investments in forward currency contracts may expose the Funds to risks resulting from unanticipated movements in foreign currency exchange rates or failure of the counter-party to the agreement to perform in accordance with the terms of the contract.

 

Reported net realized foreign exchange gains or losses arise from the sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books, and the U.S. Dollar equivalent of the amounts actually received or paid. Net            unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. The Funds include foreign currency gains and losses realized on the sale of investments together with market gains and losses on such investments in the Statements of Operations.

 

***Federal Income Taxes***- It is each Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute substantially all of its taxable income, including any net realized gains on investments not offset by loss carryovers, to shareholders. Therefore, no provision for federal income or excise            tax is required. The Adviser has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years and has concluded that as of June 30, 2009, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state (Arizona and Maryland) income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal            Revenue Service and state departments of revenue. The earliest tax year that remains subject to examination by these jurisdictions is 2005. At December 31, 2008, each fund had available for federal income tax purposes unused capital loss carryforwards, post October 2008 capital losses, and post October 2008 foreign currency losses as follows:

 

|         | **Capital Loss Carryforwards**       |       |
|--------------|--------------------------------------|------------|
|         | ****Davis****

**Opportunity**

Fund |       | **Davis Government Bond Fund** |   | **** **Davis Financial**Fund**** |   | ****Davis****Appreciation & Income Fund**** |   | **Davis Real Estate Fund** |   |
| **Expiring** |                                 |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 12/31/2009   | $                                    | –    |   | $ | – |   | $ | – |   | $ | – |   | $ | – |   |
| 12/31/2010   |                                 | –    |   |   | – |   |   | – |   |   | – |   |   | – |   |
| 12/31/2011   |                                 | –    |   |   | 2,128,000 |   |   | – |   |   | – |   |   | – |   |
| 12/31/2012   |                                 | –    |   |   | 1,243,000 |   |   | – |   |   | – |   |   | – |   |
| 12/31/2013   |                                 | –    |   |   | 403,000 |   |   | – |   |   | – |   |   | – |   |
| 12/31/2014   |                                 | –    |   |   | 304,000 |   |   | – |   |   | – |   |   | – |   |
| 12/31/2015   |                                 | –    |   |   | 137,000 |   |   | – |   |   | – |   |   | – |   |
| 12/31/2016   |                                 | 86,853,000 |   |   | – |   |   | 8,312,000 |   |   | 430,000 |   |   | 8,689,000 |   |
|         | $                                    | 86,853,000 |   | $ | 4,215,000 |   | $ | 8,312,000 |   | $ | 430,000 |   | $ | 8,689,000 |   |

 

|                                 | **Post October**

**2008 Capital Losses**

**(expire**

**December 31, 2017)** |           | **Post October**

**2008 Foreign**

**Currency Losses**

**(deferred)** |   |
|--------------------------------------|--------------------------------------------------------------------------------|----------------|-------------------------------------------------------------------------|--------|
| Davis Opportunity Fund               | $                                                                              | 21,862,000     |                                                                    | $      | 37,000 |   |
| Davis Government Bond Fund           |                                                                           | 236,000        |                                                                    |   | – |   |
| Davis Appreciation & Income Fund |                                                                           | 4,214,000      |                                                                    |   | – |   |
| Davis Real Estate Fund               |                                                                           | 704,000        |                                                                    |   | 17,000 |   |
|                                 |                                                                           |  

  |                                                                    |   |   |  

 

  |

 

 

47

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (CONTINUED)**

 

***Securities Transactions and Related Investment Income***- Securities transactions are accounted for on the trade date (date the order to buy or sell is executed) with realized gain or loss on the sale of securities being determined based upon identified cost. Dividend income is recorded on the ex-dividend date. Dividend income from REIT securities may include return of            capital. Upon notification from the issuer, the amount of the return of capital is reclassified to adjust dividend income, reduce the cost basis, and/or adjust realized gain/loss. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned.

 

***Dividends and Distributions to Shareholders***- Dividends and distributions to shareholders are recorded on the ex-dividend date. Net investment income (loss), net realized gains (losses), and net unrealized appreciation (depreciation) on investments may differ for financial statement and tax purposes primarily due to differing treatments of wash sales, paydowns on            fixed income securities, foreign currency transactions, net operating losses, and passive foreign investment company shares. The character of dividends and distributions made during the fiscal year from net investment income and net realized securities gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividends and distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which            income or realized gain was recorded by the Funds. The Funds adjust the classification of distributions to shareholders to reflect the differences between financial statement amounts and distributions determined in accordance with income tax regulations.

 

***Indemnification***- Under the Funds’ organizational documents, their officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, some of the Funds’ contracts with their service providers contain general indemnification clauses. The Funds’ maximum exposure under these            arrangements is unknown since the amount of any future claims that may be made against the Funds cannot be determined and the Funds have no historical basis for predicting the likelihood of any such claims.

 

***Use of Estimates in Financial Statements***- In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as            well as the reported amounts of income and expenses during the reporting period. Actual results may differ from these estimates.

 

**NOTE 2 - PURCHASES AND SALES OF SECURITIES**

 

Purchases and sales of investment securities (excluding short-term securities) during the six months ended June 30, 2009 for the Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund were as follows:

 

|              | ****Davis Opportunity Fund**** |        | **Davis Government Bond Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |       | **Davis Real Estate Fund** |   |
|-------------------|--------------------------------|-------------|--------------------------------|--------|--------------------------|--------|------------------------------------------|------------|----------------------------|--------|
| Cost of purchases | $                              | 56,197,797  |                           | $      | 73,639,177               |   | $                                        | 33,529,641 |                       | $      | 22,409,449 |   | $ | 88,993,198 |   |
| Proceeds of sales |                           | 115,551,475 |                           |   | 25,709,342               |   |                                     | 44,719,103 |                       |   | 80,540,822 |   |   | 104,536,891 |   |

 

 

48

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 3 - INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES**

 

Advisory fees are paid monthly to the Adviser. The annual rate for the Davis Government Money Market Fund is 0.50% of the first $250 million of average net assets, 0.45% of the next $250 million, and 0.40% of average net assets in excess of $500 million.Effective May 1, 2009, the Adviser agreed to voluntarily waive all advisory fees in excess of 0.30% for the Davis Government Money Market Fund until            December 31, 2009. The reduction in the advisory fee amounted to $110,429 for the six months ended June 30, 2009. The annual rate for each of the Davis Opportunity Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund was 0.75% for the first $250 million of average net assets, 0.65% on the next $250 million, and 0.55% of average net assets in excess of $500 million. Advisory fees paid during the six months ended June 30, 2009, approximated            0.71%, 0.42%,0.70%,0.72%,and 0.75% of average net assets for the Davis Opportunity Fund, Davis Government Money Market Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund, respectively. Effective July 1, 2009, the Adviser voluntarily reduced the advisory fee breakpoints above 0.55% for Davis Opportunity Fund, Davis Financial Fund, Davis Appreciation & Income Fund,            and Davis Real Estate Fund. As a result, the new annual rate for these funds is 0.55% of the average net assets. The annual rate for the Davis Government Bond Fund is 0.30% of the average net assets.

 

Boston Financial Data Services, Inc. (“BFDS”) is the Funds’ primary transfer agent. The Adviser is also paid for certain transfer agent services. The fee for these services for the six months ended June 30, 2009 for the Davis Opportunity Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real            Estate Fund amounted to $26,470, $6,604, $9,605, $32,398, $18,052, and $17,296, respectively. State Street Bank and Trust Company (“State Street Bank”) is the Funds’ primary accounting provider. Fees for such services are included in the custodian fee as State Street Bank also serves as the Funds’ custodian. The Adviser is also paid for certain accounting services. The fee for these services for the six months ended June 30, 2009 for the Davis Opportunity            Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund amounted to $5,502, $1,500, $4,002,$4,002, $4,998,and $3,498, respectively. Certain directors and officers of the Funds are also directors and officers of the general partner of the Adviser.

 

Davis Selected Advisers-NY, Inc. (“DSA-NY”), a wholly-owned subsidiary of the Adviser, acts as sub-adviser to the Funds. DSA-NY performs research and portfolio management services for the Funds under a Sub-Advisory Agreement with the Adviser. The Funds pay no fees directly to DSA-NY.

 

**NOTE 4 - EXPENSES PAID INDIRECTLY**

 

Under an agreement with State Street Bank, custodian fees are reduced for earnings on cash balances maintained at the custodian by the Funds. Such reductions amounted to $2 and $1 for Davis Financial Fund and Davis Real Estate Fund, respectively, during the six months ended June 30, 2009.

 

49

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 5 – CAPITAL STOCK**

 

At June 30, 2009, there were 10 billion shares of capital stock ($0.01 par value per share) authorized, of which 550 million shares each are designated to the Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund, and 4.2 billion shares are designated to the Davis Government Money Market Fund. Transactions in capital            stock were as follows: 

 

| **Class A**                    | **Six months ended June 30, 2009 (Unaudited)** |        |
|--------------------------------|------------------------------------------------|-------------|
|                           | **Davis Opportunity Fund**                     |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                                           | 1,311,618   |   |   | 5,694,894 |   |   | 241,902,693 |   |   | 2,352,983 |   |   | 1,262,074 |   |   | 1,499,105 |   |
| Shares issued in reinvestment  |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                                           | –     |   |   | 264,153 |   |   | 733,957 |   |   | – |   |   | 50,035 |   |   | 85,250 |   |
|                           |                                           | 1,311,618   |   |   | 5,959,047 |   |   | 242,636,650 |   |   | 2,352,983 |   |   | 1,312,109 |   |   | 1,584,355 |   |
| Shares redeemed                |                                           | (3,989,698  | ) |   | (3,982,890 | ) |   | (267,589,407 | ) |   | (2,630,006 | ) |   | (3,077,976 | ) |   | (2,307,543 | ) |
| Net increase (decrease)        |                                           | (2,678,080  | ) |   | 1,976,157 |   |   | (24,952,757 | ) |   | (277,023 | ) |   | (1,765,867 | ) |   | (723,188 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                              | 18,671,172  |   | $ | 32,219,168 |   | $ | 241,902,693 |   | $ | 45,889,377 |   | $ | 20,754,068 |   | $ | 19,824,292 |   |
| Proceeds from shares issued in |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                                           | –     |   |   | 1,495,643 |   |   | 733,957 |   |   | – |   |   | 792,553 |   |   | 913,021 |   |
|                           |                                           | 18,671,172  |   |   | 33,714,811 |   |   | 242,636,650 |   |   | 45,889,377 |   |   | 21,546,621 |   |   | 20,737,313 |   |
| Cost of shares redeemed        |                                           | (55,445,994 | ) |   | (22,528,830 | ) |   | (267,589,407 | ) |   | (49,341,443 | ) |   | (49,864,635 | ) |   | (29,272,031 | ) |
| Net increase (decrease)        | $                                              | (36,774,822 | ) | $ | 11,185,981 |   | $ | (24,952,757 | ) | $ | (3,452,066 | ) | $ | (28,318,014 | ) | $ | (8,534,718 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                                |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **Class A**                    | **Year ended December 31, 2008** |         |
|--------------------------------|----------------------------------|--------------|
|                           | **Davis Opportunity Fund**       |         | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                             | 4,241,650    |   |   | 14,185,191 |   |   | 716,678,185 |   |   | 6,570,444 |   |   | 3,720,547 |   |   | 2,538,842 |   |
| Shares issued in reinvestment  |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                             | 9,151        |   |   | 284,542 |   |   | 10,176,283 |   |   | 1,850,106 |   |   | 328,720 |   |   | 717,064 |   |
|                           |                             | 4,250,801    |   |   | 14,469,733 |   |   | 726,854,468 |   |   | 8,420,550 |   |   | 4,049,267 |   |   | 3,255,906 |   |
| Shares redeemed                |                             | (11,981,317  | ) |   | (3,081,760 | ) |   | (954,704,951 | ) |   | (5,010,033 | ) |   | (10,063,513 | ) |   | (5,084,748 | ) |
| Net increase (decrease)        |                             | (7,730,516   | ) |   | 11,387,973 |   |   | (227,850,483 | ) |   | 3,410,517 |   |   | (6,014,246 | ) |   | (1,828,842 | ) |
|                           |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                | 77,804,558   |   | $ | 79,604,585 |   | $ | 716,678,185 |   | $ | 212,189,593 |   | $ | 88,397,474 |   | $ | 67,179,339 |   |
| Proceeds from shares issued in |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                             | 111,144      |   |   | 1,597,296 |   |   | 10,176,283 |   |   | 32,061,220 |   |   | 7,822,616 |   |   | 11,673,045 |   |
|                           |                             | 77,915,702   |   |   | 81,201,881 |   |   | 726,854,468 |   |   | 244,250,813 |   |   | 96,220,090 |   |   | 78,852,384 |   |
| Cost of shares redeemed        |                             | (235,080,077 | ) |   | (17,297,098 | ) |   | (954,704,951 | ) |   | (146,974,242 | ) |   | (233,418,067 | ) |   | (126,407,004 | ) |
| Net increase (decrease)        | $                                | (157,164,375 | ) | $ | 63,904,783 |   | $ | (227,850,483 | ) | $ | 97,276,571 |   | $ | (137,197,977 | ) | $ | (47,554,620 | ) |
|                           |                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                  |              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

50

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 5 – CAPITAL STOCK – (CONTINUED)**

 

| **Class B**                    | **Six months ended June 30, 2009 (Unaudited)** |       |
|--------------------------------|------------------------------------------------|------------|
|                           | **Davis Opportunity Fund**                     |       | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                                           | 71,502     |   |   | 1,166,694 |   |   | 5,787,267 |   |   | 62,870 |   |   | 78,525 |   |   | 6,629 |   |
| Shares issued in reinvestment  |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                                           | –    |   |   | 30,478 |   |   | 67,639 |   |   | – |   |   | 2,301 |   |   | 1,785 |   |
|                           |                                           | 71,502     |   |   | 1,197,172 |   |   | 5,854,906 |   |   | 62,870 |   |   | 80,826 |   |   | 8,414 |   |
| Shares redeemed                |                                           | (406,166   | ) |   | (949,076 | ) |   | (8,464,767 | ) |   | (227,301 | ) |   | (219,855 | ) |   | (111,100 | ) |
| Net increase (decrease)        |                                           | (334,664   | ) |   | 248,096 |   |   | (2,609,861 | ) |   | (164,431 | ) |   | (139,029 | ) |   | (102,686 | ) |
|                           |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                              | 899,590    |   | $ | 6,581,456 |   | $ | 5,787,267 |   | $ | 1,069,816 |   | $ | 1,295,715 |   | $ | 85,876 |   |
| Proceeds from shares issued in |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                                           | –    |   |   | 172,007 |   |   | 67,639 |   |   | – |   |   | 36,059 |   |   | 18,935 |   |
|                           |                                           | 899,590    |   |   | 6,753,463 |   |   | 5,854,906 |   |   | 1,069,816 |   |   | 1,331,774 |   |   | 104,811 |   |
| Cost of shares redeemed        |                                           | (4,893,770 | ) |   | (5,356,334 | ) |   | (8,464,767 | ) |   | (3,659,188 | ) |   | (3,539,878 | ) |   | (1,394,386 | ) |
| Net increase (decrease)        | $                                              | (3,994,180 | ) | $ | 1,397,129 |   | $ | (2,609,861 | ) | $ | (2,589,372 | ) | $ | (2,208,104 | ) | $ | (1,289,575 | ) |
|                           |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **Class B**                    | **Year ended December 31, 2008** |        |
|--------------------------------|----------------------------------|-------------|
|                           | **Davis Opportunity Fund**       |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                             | 219,868     |   |   | 3,058,175 |   |   | 21,248,189 |   |   | 235,172 |   |   | 211,372 |   |   | 46,718 |   |
| Shares issued in reinvestment  |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                             | –     |   |   | 54,171 |   |   | 550,582 |   |   | 96,189 |   |   | 14,925 |   |   | 25,502 |   |
|                           |                             | 219,868     |   |   | 3,112,346 |   |   | 21,798,771 |   |   | 331,361 |   |   | 226,297 |   |   | 72,220 |   |
| Shares redeemed                |                             | (1,148,802  | ) |   | (2,057,821 | ) |   | (14,299,474 | ) |   | (899,439 | ) |   | (750,157 | ) |   | (392,479 | ) |
| Net increase (decrease)        |                             | (928,934    | ) |   | 1,054,525 |   |   | 7,499,297 |   |   | (568,078 | ) |   | (523,860 | ) |   | (320,259 | ) |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                | 3,188,326   |   | $ | 17,143,110 |   | $ | 21,248,189 |   | $ | 6,841,592 |   | $ | 4,693,748 |   | $ | 1,286,389 |   |
| Proceeds from shares issued in |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                             | –     |   |   | 303,337 |   |   | 550,582 |   |   | 1,453,409 |   |   | 357,368 |   |   | 372,479 |   |
|                           |                             | 3,188,326   |   |   | 17,446,447 |   |   | 21,798,771 |   |   | 8,295,001 |   |   | 5,051,116 |   |   | 1,658,868 |   |
| Cost of shares redeemed        |                             | (19,775,056 | ) |   | (11,514,539 | ) |   | (14,299,474 | ) |   | (26,264,986 | ) |   | (17,538,113 | ) |   | (10,218,903 | ) |
| Net increase (decrease)        | $                                | (16,586,730 | ) | $ | 5,931,908 |   | $ | 7,499,297 |   | $ | (17,969,985 | ) | $ | (12,486,997 | ) | $ | (8,560,035 | ) |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                  |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

51

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 5 – CAPITAL STOCK – (CONTINUED)**

 

| **Class C**                    | **Six months ended June 30, 2009 (Unaudited)** |        |
|--------------------------------|------------------------------------------------|-------------|
|                           | **Davis Opportunity Fund**                     |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                                           | 262,688     |   |   | 3,523,950 |   |   | 12,453,614 |   |   | 297,152 |   |   | 310,262 |   |   | 91,203 |   |
| Shares issued in reinvestment  |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                                           | –     |   |   | 79,848 |   |   | 69,854 |   |   | – |   |   | 11,733 |   |   | 8,229 |   |
|                           |                                           | 262,688     |   |   | 3,603,798 |   |   | 12,523,468 |   |   | 297,152 |   |   | 321,995 |   |   | 99,432 |   |
| Shares redeemed                |                                           | (1,844,397  | ) |   | (2,667,260 | ) |   | (18,403,376 | ) |   | (496,890 | ) |   | (1,171,452 | ) |   | (338,942 | ) |
| Net increase (decrease)        |                                           | (1,581,709  | ) |   | 936,538 |   |   | (5,879,908 | ) |   | (199,738 | ) |   | (849,457 | ) |   | (239,510 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                              | 3,392,209   |   | $ | 19,945,831 |   | $ | 12,453,614 |   | $ | 5,111,096 |   | $ | 5,178,885 |   | $ | 1,223,624 |   |
| Proceeds from shares issued in |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                                           | –     |   |   | 452,099 |   |   | 69,854 |   |   | – |   |   | 186,785 |   |   | 88,380 |   |
|                           |                                           | 3,392,209   |   |   | 20,397,930 |   |   | 12,523,468 |   |   | 5,111,096 |   |   | 5,365,670 |   |   | 1,312,004 |   |
| Cost of shares redeemed        |                                           | (22,919,436 | ) |   | (15,099,095 | ) |   | (18,403,376 | ) |   | (7,948,895 | ) |   | (18,803,065 | ) |   | (4,229,625 | ) |
| Net increase (decrease)        | $                                              | (19,527,227 | ) | $ | 5,298,835 |   | $ | (5,879,908 | ) | $ | (2,837,799 | ) | $ | (13,437,395 | ) | $ | (2,917,621 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                                |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **Class C**                    | **Year ended December 31, 2008** |        |
|--------------------------------|----------------------------------|-------------|
|                           | **Davis Opportunity Fund**       |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                             | 2,384,398   |   |   | 7,456,659 |   |   | 40,767,262 |   |   | 1,494,450 |   |   | 1,459,878 |   |   | 283,618 |   |
| Shares issued in reinvestment  |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                             | –     |   |   | 105,433 |   |   | 390,667 |   |   | 354,966 |   |   | 68,834 |   |   | 97,645 |   |
|                           |                             | 2,384,398   |   |   | 7,562,092 |   |   | 41,157,929 |   |   | 1,849,416 |   |   | 1,528,712 |   |   | 381,263 |   |
| Shares redeemed                |                             | (5,384,999  | ) |   | (3,252,106 | ) |   | (22,036,611 | ) |   | (895,809 | ) |   | (2,598,830 | ) |   | (904,882 | ) |
| Net increase (decrease)        |                             | (3,000,601  | ) |   | 4,309,986 |   |   | 19,121,318 |   |   | 953,607 |   |   | (1,070,118 | ) |   | (523,619 | ) |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                | 35,167,600  |   | $ | 41,908,139 |   | $ | 40,767,262 |   | $ | 42,628,926 |   | $ | 30,224,222 |   | $ | 7,614,962 |   |
| Proceeds from shares issued in |                                  |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| reinvestment of distributions  |                             | –     |   |   | 592,176 |   |   | 390,667 |   |   | 5,487,859 |   |   | 1,661,484 |   |   | 1,433,968 |   |
|                           |                             | 35,167,600  |   |   | 42,500,315 |   |   | 41,157,929 |   |   | 48,116,785 |   |   | 31,885,706 |   |   | 9,048,930 |   |
| Cost of shares redeemed        |                             | (92,395,435 | ) |   | (18,254,845 | ) |   | (22,036,611 | ) |   | (23,117,853 | ) |   | (57,877,324 | ) |   | (21,483,555 | ) |
| Net increase (decrease)        | $                                | (57,227,835 | ) | $ | 24,245,470 |   | $ | 19,121,318 |   | $ | 24,998,932 |   | $ | (25,991,618 | ) | $ | (12,434,625 | ) |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                  |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

52

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 5 – CAPITAL STOCK – (CONTINUED)**

 

| **Class Y**                    | **Six months ended June 30, 2009 (Unaudited)** |        |
|--------------------------------|------------------------------------------------|-------------|
|                           | **Davis Opportunity Fund**                     |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                                           | 1,207,500   |   |   | 512,810 |   |   | 59,939 |   |   | 91,054 |   |   | 203,409 |   |   | 256,686 |   |
| Shares issued in reinvestment  |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                                           | –     |   |   | 7,039 |   |   | 342 |   |   | – |   |   | 12,982 |   |   | 13,510 |   |
|                           |                                           | 1,207,500   |   |   | 519,849 |   |   | 60,281 |   |   | 91,054 |   |   | 216,391 |   |   | 270,196 |   |
| Shares redeemed                |                                           | (860,706    | ) |   | (510,691 | ) |   | (103,190 | ) |   | (89,984 | ) |   | (945,593 | ) |   | (664,927 | ) |
| Net increase (decrease)        |                                           | 346,794     |   |   | 9,158 |   |   | (42,909 | ) |   | 1,070 |   |   | (729,202 | ) |   | (394,731 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                              | 16,966,278  |   | $ | 2,922,259 |   | $ | 59,939 |   | $ | 1,905,387 |   | $ | 3,580,322 |   | $ | 3,359,423 |   |
| Proceeds from shares issued in |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                                           | –     |   |   | 40,143 |   |   | 342 |   |   | – |   |   | 206,536 |   |   | 146,310 |   |
|                           |                                           | 16,966,278  |   |   | 2,962,402 |   |   | 60,281 |   |   | 1,905,387 |   |   | 3,786,858 |   |   | 3,505,733 |   |
| Cost of shares redeemed        |                                           | (12,249,054 | ) |   | (2,909,676 | ) |   | (103,190 | ) |   | (1,617,036 | ) |   | (14,703,863 | ) |   | (9,127,638 | ) |
| Net increase (decrease)        | $                                              | 4,717,224   |   | $ | 52,726 |   | $ | (42,909 | ) | $ | 288,351 |   | $ | (10,917,005 | ) | $ | (5,621,905 | ) |
|                           |                                           |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                                |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

| **Class Y**                    | **Year ended December 31, 2008** |        |
|--------------------------------|----------------------------------|-------------|
|                           | **Davis Opportunity Fund**       |        | **Davis Government Bond Fund** |   | **Davis Government Money Market Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |   |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares sold                    |                             | 1,761,724   |   |   | 311,451 |   |   | 67,227 |   |   | 320,379 |   |   | 1,032,931 |   |   | 531,932 |   |
| Shares issued in reinvestment  |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| of distributions               |                             | 11,355      |   |   | 4,518 |   |   | 2,541 |   |   | 45,708 |   |   | 79,066 |   |   | 108,453 |   |
|                           |                             | 1,773,079   |   |   | 315,969 |   |   | 69,768 |   |   | 366,087 |   |   | 1,111,997 |   |   | 640,385 |   |
| Shares redeemed                |                             | (1,857,819  | ) |   | (102,944 | ) |   | (74,920 | ) |   | (134,581 | ) |   | (1,789,496 | ) |   | (628,372 | ) |
| Net increase (decrease)        |                             | (84,740     | ) |   | 213,025 |   |   | (5,152 | ) |   | 231,506 |   |   | (677,499 | ) |   | 12,013 |   |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from shares sold      | $                                | 34,500,987  |   | $ | 1,764,983 |   | $ | 67,227 |   | $ | 10,700,917 |   | $ | 25,566,795 |   | $ | 13,298,230 |   |
| Proceeds from shares issued in |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| reinvestment of distributions  |                             | 141,710     |   |   | 25,562 |   |   | 2,541 |   |   | 809,954 |   |   | 1,856,195 |   |   | 1,821,122 |   |
|                           |                             | 34,642,697  |   |   | 1,790,545 |   |   | 69,768 |   |   | 11,510,871 |   |   | 27,422,990 |   |   | 15,119,352 |   |
| Cost of shares redeemed        |                             | (36,405,303 | ) |   | (581,248 | ) |   | (74,920 | ) |   | (4,032,685 | ) |   | (41,669,303 | ) |   | (13,400,338 | ) |
| Net increase (decrease)        | $                                | (1,762,606  | ) | $ | 1,209,297 |   | $ | (5,152 | ) | $ | 7,478,186 |   | $ | (14,246,313 | ) | $ | 1,719,014 |   |
|                           |                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |                                  |             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

**NOTE 6 - BANK BORROWINGS**

 

Each Fund may borrow up to 5% of its assets from a bank to purchase portfolio securities, or for temporary and emergency purposes. The purchase of securities with borrowed funds creates leverage in the Fund. Each Fund has entered into an agreement, which enables it to participate with certain other funds managed by the Adviser in an unsecured line of credit with a bank, which permits borrowings up to            $50 million, collectively. Interest is charged based on its borrowings, at a rate equal to the overnight Federal Funds Rate plus 0.75%. At June 30, 2009, Davis Financial Fund had no borrowings outstanding. For the six months ended June 30, 2009, the average daily loan balance was $558,994 at an average interest rate of 0.96%. Davis Financial Fund had gross borrowings and gross repayments of $19,035,000 during the six months ended June 30, 2009. The maximum amount of borrowings            outstanding at any month end was $1,880,000 during the six months ended June 30, 2009. Davis Opportunity Fund, Davis Government Bond Fund, Davis Government Money Market Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund had no borrowings outstanding for the six months ended June 30, 2009.

 

53

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 7 - DISTRIBUTION AND UNDERWRITING FEES**

 

***Class A Shares of the Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund*****-**Class A shares of the Funds are sold at net asset value plus a sales charge and are redeemed at net asset value.

 

Davis Distributors, LLC, the Funds’ Underwriter (“Underwriter” or “Distributor”) received commissions earned on sales of Class A shares of the Funds (other than Davis Government Money Market Fund) of which a portion was retained by the Underwriter and the remaining was re-allowed to investment dealers. The Underwriter paid the costs of prospectuses, in excess of those            required to be filed as part of the Funds’ registration statement, sales literature, and other expenses assumed or incurred in connection with such sales.

 

The Underwriter is reimbursed for amounts paid to dealers as a service fee or commissions with respect to Class A shares sold by dealers, which remain outstanding during the period. The service fee is paid at the annual rate up to 1/4 of 1.00% of the average net assets maintained by the responsible dealers.

 

|                                                | **Six months ended June 30, 2009 (Unaudited)** |
|-----------------------------------------------------|------------------------------------------------|
|                                                | **Davis Opportunity Fund**                     |   | **Davis Government Bond Fund** |   | **Davis Financial Fund** |   | **Davis Appreciation & Income Fund** |   | **Davis Real Estate Fund** |
| Commissions retained by Underwriter                 | $                                              | 11,619 |   | $ | 7,584 |   | $ | 21,296 |   | $ | 6,432 |   | $ | 4,354 |
| Commissions re-allowed to investment dealers        |                                           | 64,933 |   |   | 42,430 |   |   | 118,682 |   |   | 33,855 |   |   | 23,747 |
| Total commissions earned on sales of Class A shares | $                                              | 76,552 |   | $ | 50,014 |   | $ | 139,978 |   | $ | 40,287 |   | $ | 28,101 |
|                                                |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Class A service fee                                 | $                                              | 285,548 |   | $ | 94,036 |   | $ | 405,266 |   | $ | 216,526 |   | $ | 199,861 |
|                                                |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

***Class B Shares of the Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund*****-**Class B shares of the Funds are sold at net asset value and are redeemed at net asset value. A contingent deferred sales charge may be assessed on shares redeemed within six            years of purchase.

 

Each of the Class B shares of the Funds (other than Davis Government Money Market Fund) pays a distribution fee to reimburse the Distributor for commission advances on the sale of each Fund’s Class B shares. Payments under the Class B Distribution Plan are limited to an annual rate of equal to the lesser of 1.25% of the average daily net asset value of the Class B shares or the maximum amount            provided by applicable rule or regulation of the Financial Industry Regulatory Authority, Inc. ("FINRA"), which currently is 1.00%. Therefore, the effective rate of the Class B Distribution Plan is currently 1.00%, of which 0.75% may be used to pay distribution expenses and 0.25% may be used to pay shareholder service fees. The FINRA rule also limits the aggregate amount each Fund may pay for distribution to 6.25% of gross Fund sales since inception of the Distribution Plan, plus            interest at 1.00% over the prime rate on unpaid amounts. 

 

Commission advances by the Distributor on the sale of Class B shares are re-allowed to qualified selling dealers.

 

The Distributor intends to seek payment from Class B shares of the Funds (other than Davis Government Money Market Fund) for distribution charges, representing 6.25% of gross Fund sales of Class B shares, plus interest, reduced by cumulative distribution fees paid by the Funds and cumulative contingent deferred sales charges paid by redeeming shareholders. The Funds have no contractual obligation to            pay any such distribution chargesand the amounts, if any, timing and condition of such carryover payments are solely within the discretion of the Directors who are not interested persons of the Funds or the Distributor.

 

A contingent deferred sales charge is imposed upon redemption of certain Class B shares of the Funds within six years of the original purchase. The charge is a declining percentage starting at 4.00% of the lesser of net asset value of the shares redeemed or the total cost of such shares. 

 

54

 

 

 

----

| **DAVIS SERIES, INC.** | **Notes to Financial Statements – (Continued)** |
|------------------------|-------------------------------------------------------|

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 7 - DISTRIBUTION AND UNDERWRITING FEES – (CONTINUED)**

 

***Class B Shares*****-*****(Continued)***

 

|                                                 | **Six months ended June 30, 2009 (Unaudited)** |
|------------------------------------------------------|------------------------------------------------|
|                                                 | **Davis**

**Opportunity**

**Fund**           |   | **Davis Government**

**Bond Fund** |   | **Davis**

**Financial**

**Fund** |   | **Davis Appreciation**

**Fund** |   | **Davis**

**Real Estate**

**Fund** |
| Distribution Plan Payments:                          |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distribution fees                                    | $                                              | 74,768 |   | $ | 66,551 |   | $ | 45,996 |   | $ | 60,267 |   | $ | 21,351 |
| Service fees                                         |                                           | 24,519 |   |   | 22,050 |   |   | 15,042 |   |   | 19,771 |   |   | 6,830 |
| Commission advances by the Distributor               |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on the sale of Class B shares                        |                                           | 12,955 |   |   | 39,473 |   |   | 23,170 |   |   | 8,969 |   |   | 2,544 |
| Cumulative distribution charges (carryover payments) |                                           | 2,629,543 |   |   | 5,884,083 |   |   | 30,421,624 |   |   | 9,099,224 |   |   | 17,493,122 |
| Contingent deferred sales charges received by the    |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributor from Class B shares                      |                                           | 26,800 |   |   | 28,251 |   |   | 18,662 |   |   | 32,491 |   |   | 6,307 |
|                                                 |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |

 

***Class C Shares of the Davis Opportunity Fund, Davis Government Bond Fund, Davis Financial Fund, Davis Appreciation & Income Fund, and Davis Real Estate Fund*****–**Class C shares of the Funds are sold at net asset value and are redeemed at net asset value. A contingent deferred sales charge may be assessed on shares redeemed within            the first year of purchase.

 

Each of the Class C shares of the Funds (other than Davis Government Money Market Fund) pays a distribution fee to reimburse the Distributor for commission advances on the sale of each Fund’s Class C shares. Payments under the Class C Distribution Plan are limited to an annual rate of equal to the lesser of 1.25% of the average daily net asset value of the Class C shares or the maximum amount            provided by applicable rule or regulation of the FINRA, which currently is 1.00%. Therefore, the effective rate of the Class C Distribution Plan is currently 1.00%, of which 0.75% may be used to pay distribution expenses and 0.25% may be used to pay shareholder service fees. Class C shares are subject to the same 6.25% and 1.00% limitations applicable to the Class B Distribution Plan.

 

Commission advances by the Distributor on the sale of Class C shares are re-allowed to qualified selling dealers.

 

The Distributor intends to seek payment from Class C shares of the Funds (other than Davis Government Money Market Fund) for distribution charges, representing 6.25% of gross Fund sales of Class C shares, plus interest, reduced by cumulative distribution fees paid by the Funds and cumulative contingent deferred sales charges paid by redeeming shareholders. The Funds have no contractual obligation to            pay any such distribution chargesand the amounts, if any, timing and condition of such carryover payments are solely within the discretion of the Directors who are not interested persons of the Funds or the Distributor.

 

A contingent deferred sales charge of 1.00% is imposed upon redemption of certain Class C shares of the Funds within the first year of the original purchase. 

 

|                                                 | **Six months ended June 30, 2009 (Unaudited)** |       |
|------------------------------------------------------|------------------------------------------------|------------|
|                                                 | ****Davis****

**Opportunity**

**Fund**       |       | ****Davis Government****

**Bond Fund** |   | ****Davis****

**Financial**

**Fund** |   | ****Davis Appreciation****

**Fund** |   | ****Davis****

**Real Estate**

**Fund** |   |
| Distribution Plan Payments:                          |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Distribution fees                                    | $                                              | 405,898    |   | $ | 161,903 |   | $ | 204,956 |   | $ | 272,732 |   | $ | 85,139 |
| Service fees                                         |                                           | 135,299    |   |   | 53,968 |   |   | 68,318 |   |   | 90,911 |   |   | 28,380 |
| Commission advances by the Distributor               |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| on the sale of Class C shares                        |                                           | 19,072     |   |   | 30,282 |   |   | 41,767 |   |   | 17,660 |   |   | 6,136 |
| Cumulative distribution charges (carryover payments) |                                           | 18,115,411 |   |   | 274,637 |   |   | 23,114,499 |   |   | 13,195,646 |   |   | 11,604,104 |
| Contingent deferred sales charges received by the    |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Distributor from Class C shares                      |                                           | 3,225      |   |   | 5,037 |   |   | 11,433 |   |   | 11,991 |   |   | 895 |
|                                                 |                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |                                                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

55

 

 

----

**DAVIS SERIES,            INC.**                                                                                **Notes to Financial Statements – (Continued)**

|   | **June 30, 2009*****(Unaudited)*** |
|--------|------------------------------------|

 

**NOTE 7 - DISTRIBUTION AND UNDERWRITING FEES – (CONTINUED)**

 

***Davis Government Money Market Fund*****-**All classes of shares of the Davis Government Money Market Fund are sold to investors at net asset value. The shareholders of the Davis Government Money Market Fund have adopted a Distribution expense plan in accordance with Rule 12b-1, which does not provide for any amounts to be paid directly to the            Distributor as either compensation or reimbursement for distributing shares of the Fund, but does authorize the use of the advisory fee to the extent such fee may be considered to be indirectly financing any activity or expense which is primarily intended to result in the sale of Fund shares.

 

**NOTE 8 - ILLIQUID AND RESTRICTED SECURITIES**

 

Securities may be considered illiquid if they lack a readily available market or if valuation has not changed for a certain period of time. Restricted securities are not registered under the Securities Act of 1933 and may have contractual restrictions on resale. They are valued under methods approved by the Board of Directors as reflecting fair value. The aggregate value of illiquid securities in            Davis Opportunity Fund amounted to $14,861,875 or 3.22% of the Fund’s net assets as of June 30, 2009.The aggregate value of illiquid securities in Davis Financial Fund amounted to $23,693,000 or 4.16% of the Fund’s net assets as of June 30, 2009.The aggregate value of restricted securities in Davis Financial Fund amounted to $2,530,782 or 0.44% of the Fund’s net assets as of June 30, 2009. The aggregate value of            illiquid securities in Davis Appreciation & Income Fund amounted to $10,411,889 or 2.77% of the Fund’s net assets as of June 30, 2009. Information regarding illiquid and restricted securities is as follows:

 

 

| Fund               |   | Security                   | Acquisition

Date | Principal |       | Units/

Shares |      | Cost per

Unit/

Share |   | Valuation per Unit/Share

as of 

June 30, 2009 |
|--------------------|--------|----------------------------|-------------------|-----------|------------|----------------|-----------|------------------------|--------|-------------------------------------------------|
|               |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Davis              |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Opportunity        |   | Oaktree Capital Group      |              |      |       |           |      |                   |   |                                            |   |   |   |
| Fund               |   | LLC, Class A               | 05/21/07          |      | NA         |           | 691,250   |                   | $      | 27.92                                           |   | $ | 21.50 |
|               |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Davis Financial    |   | Oaktree Capital Group      |              |      |       |           |      |                   |   |                                            |   |   |   |
| Fund               |   | LLC, Class A               | 05/21/07          |      | NA         |           | 1,102,000 |                   | $      | 23.00                                           |   | $ | 21.50 |
|               |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Davis Financial    |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Fund               |   | RHJ International, 144A    | 06/04/07          |      | NA         |           | 396,550   |                   | $      | 19.64                                           |   | $ | 6.38 |
|               |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Davis              |   | News America Inc.,         |              |      |       |           |      |                   |   |                                            |   |   |   |
| Appreciation & |   | Conv. Notes, Zero          |              |      |       |           |      |                   |   |                                            |   |   |   |
| Income Fund        |   | coupon, 3.38%, 02/28/21    | 10/07/03          | $         | 16,050,000 |           | 160,500   |                   | $      | 67.63                                           |   | $ | 62.69 |
|               |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Davis              |   |                       |              |      |       |           |      |                   |   |                                            |   |   |   |
| Appreciation & |   | Thornburg Mortgage, Inc.,  |              |      |       |           |      |                   |   |                                            |   |   |   |
| Income Fund        |   | Sr. Notes, 8.00%, 05/15/13 | 10/22/07          | $         | 14,000,000 |           | 140,000   |                   | $      | 87.20                                           |   | $ | 2.50 |

 

 

56

 

 

----

| **DAVIS SERIES, INC.**                                                                                                           |                                 |                         |                                       |                             |
|----------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|------------------------------|--------------------------------------------|----------------------------------|
|                                                                                                                             |                                 |                         |                                       |                             |
| The following financial information represents selected data for each share of capital stock outstanding throughout each period: |                                 |                         |                                       |                             |
|                                                                                                                             |                                 |                         |                                       |                             |
| Income (Loss) from Investment Operations                                                                                         |                                 |                         |                                       |                             |
|                                                                                                                             | Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations |   |
| **Davis Opportunity Fund Class A:**                                                                                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $13.92                               | $0.05e                       | $2.34                                      | $2.39                            |   |
| Year ended December 31, 2008                                                                                                     | $25.19                               | $0.09e                       | $(11.35)                                   | $(11.26)                         |   |
| Year ended December 31, 2007                                                                                                     | $27.52                               | $0.05e                       | $(0.43)                                    | $(0.38)                          |   |
| Year ended December 31, 2006                                                                                                     | $24.29                               | $–e,g                  | $4.25                                      | $4.25                            |   |
| Year ended December 31, 2005                                                                                                     | $23.20                               | $0.05e                       | $1.88                                      | $1.93                            |   |
| Year ended December 31, 2004                                                                                                     | $20.47                               | $0.08                        | $2.65                                      | $2.73                            |   |
| **Davis Opportunity Fund Class B:**                                                                                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $12.00                               | $(0.02)e                     | $2.00                                      | $1.98                            |   |
| Year ended December 31, 2008                                                                                                     | $21.89                               | $(0.07)e                     | $(9.82)                                    | $(9.89)                          |   |
| Year ended December 31, 2007                                                                                                     | $24.17                               | $(0.15)e                     | $(0.36)                                    | $(0.51)                          |   |
| Year ended December 31, 2006                                                                                                     | $21.44                               | $(0.18)e                     | $3.72                                      | $3.54                            |   |
| Year ended December 31, 2005                                                                                                     | $20.55                               | $(0.13)e                     | $1.66                                      | $1.53                            |   |
| Year ended December 31, 2004                                                                                                     | $18.28                               | $(0.08)                      | $2.35                                      | $2.27                            |   |
| **Davis Opportunity Fund Class C:**                                                                                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $12.60                               | $–e,g                  | $2.11                                      | $2.11                            |   |
| Year ended December 31, 2008                                                                                                     | $22.97                               | $(0.05)e                     | $(10.32)                                   | $(10.37)                         |   |
| Year ended December 31, 2007                                                                                                     | $25.27                               | $(0.15)e                     | $(0.38)                                    | $(0.53)                          |   |
| Year ended December 31, 2006                                                                                                     | $22.37                               | $(0.18)e                     | $3.90                                      | $3.72                            |   |
| Year ended December 31, 2005                                                                                                     | $21.42                               | $(0.13)e                     | $1.73                                      | $1.60                            |   |
| Year ended December 31, 2004                                                                                                     | $19.05                               | $(0.06)                      | $2.43                                      | $2.37                            |   |
| **Davis Opportunity Fund Class Y:**                                                                                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $14.31                               | $0.09e                       | $2.40                                      | $2.49                            |   |
| Year ended December 31, 2008                                                                                                     | $25.94                               | $0.17e                       | $(11.73)                                   | $(11.56)                         |   |
| Year ended December 31, 2007                                                                                                     | $28.29                               | $0.13e                       | $(0.44)                                    | $(0.31)                          |   |
| Year ended December 31, 2006                                                                                                     | $24.95                               | $0.07e                       | $4.37                                      | $4.44                            |   |
| Year ended December 31, 2005                                                                                                     | $23.81                               | $0.13e                       | $1.93                                      | $2.06                            |   |
| Year ended December 31, 2004                                                                                                     | $20.93                               | $0.17                        | $2.71                                      | $2.88                            |   |
| **Davis Government Bond Fund Class A:**                                                                                          |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $5.65                                | $0.09                        | $0.01                                      | $0.10                            |   |
| Year ended December 31, 2008                                                                                                     | $5.60                                | $0.19                        | $0.05                                      | $0.24                            |   |
| Year ended December 31, 2007                                                                                                     | $5.52                                | $0.21                        | $0.08                                      | $0.29                            |   |
| Year ended December 31, 2006                                                                                                     | $5.50                                | $0.18                        | $0.02                                      | $0.20                            |   |
| Year ended December 31, 2005                                                                                                     | $5.60                                | $0.15                        | $(0.10)                                    | $0.05                            |   |
| Year ended December 31, 2004                                                                                                     | $5.73                                | $0.14                        | $(0.13)                                    | $0.01                            |   |
| **Davis Government Bond Fund Class B:**                                                                                          |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                                                                                  | $5.64                                | $0.07                        | $–g                                  | $0.07                            |   |
| Year ended December 31, 2008                                                                                                     | $5.58                                | $0.15                        | $0.06                                      | $0.21                            |   |
| Year ended December 31, 2007                                                                                                     | $5.51                                | $0.17                        | $0.07                                      | $0.24                            |   |
| Year ended December 31, 2006                                                                                                     | $5.49                                | $0.14                        | $0.02                                      | $0.16                            |   |
| Year ended December 31, 2005                                                                                                     | $5.59                                | $0.12                        | $(0.10)                                    | $0.02                            |   |
| Year ended December 31, 2004                                                                                                     | $5.71                                | $0.10                        | $(0.12)                                    | $(0.02)                          |   |

 

 

 

57

 

 

----

| **Financial Highlights**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|-------------------|---------------------|--------------------------------|----------------------|-------------------------------------------------|----------------------------|--------------------|-------------------------------------------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
|                   Dividends and                        Distribution                                                                                          Ratios                        to Average Net Assets |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| Dividends from Net Investment Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Distributions from

 Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total

 Returna | Net Assets, End of Period (in

 thousands) | Gross

 Expense Ratio | Net Expense Ratiob | Net Investment Income

 (Loss) Ratio | Portfolio Turnoverc |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $16.31                         | 17.17%               | $268,516                                        | 1.30%f                     | 1.30%f             | 0.75%f                                    | 13.58%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $(0.01)           | $(0.01)             | $13.92                         | (44.71)%             | $266,525                                        | 1.15%                      | 1.15%              | 0.47%                                     | 29.36%              |   |
| $(0.18)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(1.77)                                  | $–          | $(1.95)             | $25.19                         | (1.42)%              | $676,995                                        | 1.06%                      | 1.06%              | 0.16%                                     | 37.05%              |   |
| $(0.23)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.79)                                  | $–          | $(1.02)             | $27.52                         | 17.59%               | $680,181                                        | 1.10%                      | 1.10%              | (0.02)%                                   | 40.26%              |   |
| $(0.24)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.60)                                  | $–          | $(0.84)             | $24.29                         | 8.33%                | $446,794                                        | 1.15%                      | 1.15%              | 0.18%                                     | 35.77%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $23.20                         | 13.34%               | $314,526                                        | 1.20%                      | 1.20%              | 0.39%                                     | 22.22%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $13.98                         | 16.50%               | $20,903                                         | 2.27%f                     | 2.27%f             | (0.22)%f                                  | 13.58%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $12.00                         | (45.18)%             | $21,951                                         | 2.00%                      | 2.00%              | (0.38)%                                   | 29.36%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.77)                                  | $–          | $(1.77)             | $21.89                         | (2.15)%              | $60,386                                         | 1.85%                      | 1.85%              | (0.63)%                                   | 37.05%              |   |
| $(0.02)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.79)                                  | $–          | $(0.81)             | $24.17                         | 16.60%               | $81,788                                         | 1.88%                      | 1.88%              | (0.80)%                                   | 40.26%              |   |
| $(0.04)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.60)                                  | $–          | $(0.64)             | $21.44                         | 7.49%                | $96,501                                         | 1.92%                      | 1.90%              | (0.57)%                                   | 35.77%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $20.55                         | 12.42%               | $105,077                                        | 1.97%                      | 1.97%              | (0.38)%                                   | 22.22%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $14.71                         | 16.75%               | $116,378                                        | 2.10%f                     | 2.10%f             | (0.05)%f                                  | 13.58%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $12.60                         | (45.15)%             | $119,676                                        | 1.91%                      | 1.91%              | (0.29)%                                   | 29.36%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.77)                                  | $–          | $(1.77)             | $22.97                         | (2.14)%              | $287,054                                        | 1.81%                      | 1.81%              | (0.59)%                                   | 37.05%              |   |
| $(0.03)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.79)                                  | $–          | $(0.82)             | $25.27                         | 16.70%               | $260,254                                        | 1.84%                      | 1.84%              | (0.76)%                                   | 40.26%              |   |
| $(0.05)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.60)                                  | $–          | $(0.65)             | $22.37                         | 7.48%                | $150,844                                        | 1.91%                      | 1.90%              | (0.57)%                                   | 35.77%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $21.42                         | 12.44%               | $93,149                                         | 1.97%                      | 1.97%              | (0.38)%                                   | 22.22%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $16.80                         | 17.40%               | $55,263                                         | 0.91%f                     | 0.91%f             | 1.14%f                                    | 13.58%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $(0.07)           | $(0.07)             | $14.31                         | (44.54)%             | $42,119                                         | 0.85%                      | 0.85%              | 0.77%                                     | 29.36%              |   |
| $(0.27)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(1.77)                                  | $–          | $(2.04)             | $25.94                         | (1.13)%              | $78,537                                         | 0.78%                      | 0.78%              | 0.44%                                     | 37.05%              |   |
| $(0.31)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.79)                                  | $–          | $(1.10)             | $28.29                         | 17.91%               | $68,591                                         | 0.81%                      | 0.81%              | 0.27%                                     | 40.26%              |   |
| $(0.32)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(0.60)                                  | $–          | $(0.92)             | $24.95                         | 8.70%                | $50,142                                         | 0.85%                      | 0.85%              | 0.48%                                     | 35.77%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $23.81                         | 13.76%               | $17,287                                         | 0.86%                      | 0.86%              | 0.73%                                     | 22.22%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $(0.09)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.09)             | $5.66                          | 1.80%                | $103,158                                        | 0.73%f                     | 0.73%f             | 3.26%f                                    | 16.50%              |   |
| $(0.19)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.19)             | $5.65                          | 4.38%                | $91,852                                         | 0.87%                      | 0.87%              | 3.29%                                     | 66.56%              |   |
| $(0.21)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.21)             | $5.60                          | 5.45%                | $27,224                                         | 1.03%                      | 1.03%              | 3.95%                                     | 60.23%              |   |
| $(0.18)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.18)             | $5.52                          | 3.73%                | $22,134                                         | 1.05%                      | 1.05%              | 3.30%                                     | 64.94%              |   |
| $(0.15)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.15)             | $5.50                          | 0.98%                | $19,340                                         | 1.10%                      | 1.08%              | 2.52%                                     | 55.46%              |   |
| $(0.14)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–g         | $(0.14)             | $5.60                          | 0.17%                | $19,025                                         | 1.25%                      | 1.25%              | 1.84%                                     | 165.17%             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                           |                 |                                            |                       |               |                                      |                |   |
| $(0.07)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.07)             | $5.64                          | 1.18%                | $17,863                                         | 1.65%f                     | 1.65%f             | 2.34%f                                    | 16.50%              |   |
| $(0.15)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.15)             | $5.64                          | 3.77%                | $16,442                                         | 1.69%                      | 1.69%              | 2.47%                                     | 66.56%              |   |
| $(0.17)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.17)             | $5.58                          | 4.49%                | $10,402                                         | 1.77%                      | 1.77%              | 3.21%                                     | 60.23%              |   |
| $(0.14)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.14)             | $5.51                          | 3.02%                | $14,058                                         | 1.76%                      | 1.76%              | 2.59%                                     | 64.94%              |   |
| $(0.12)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.12)             | $5.49                          | 0.33%                | $25,208                                         | 1.79%                      | 1.77%              | 1.83%                                     | 55.46%              |   |
| $(0.10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–g         | $(0.10)             | $5.59                          | (0.33)%              | $34,921                                         | 1.89%                      | 1.89%              | 1.20%                                     | 165.17%             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |                   |                     |                                |                      |                                                 |                            |                    |                                           |                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

 

58

 

 

----

| **DAVIS SERIES, INC.**                                         |                                 |                         |                                       |                             |
|----------------------------------------------------------------|--------------------------------------|------------------------------|--------------------------------------------|----------------------------------|
|                                                           |                                 |                         |                                       |                             |
| Income (Loss) from Investment Operations                       |                                 |                         |                                       |                             |
|                                                           | Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations |   |
| **Davis Government Bond Fund Class C:**                        |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $5.65                                | $0.07                        | $0.01                                      | $0.08                            |   |
| Year ended December 31, 2008                                   | $5.60                                | $0.15                        | $0.05                                      | $0.20                            |   |
| Year ended December 31, 2007                                   | $5.52                                | $0.17                        | $0.08                                      | $0.25                            |   |
| Year ended December 31, 2006                                   | $5.51                                | $0.14                        | $0.01                                      | $0.15                            |   |
| Year ended December 31, 2005                                   | $5.61                                | $0.12                        | $(0.10)                                    | $0.02                            |   |
| Year ended December 31, 2004                                   | $5.73                                | $0.10                        | $(0.12)                                    | $(0.02)                          |   |
| **Davis Government Bond Fund Class Y:**                        |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $5.69                                | $0.10                        | $0.01                                      | $0.11                            |   |
| Year ended December 31, 2008                                   | $5.64                                | $0.20                        | $0.05                                      | $0.25                            |   |
| Year ended December 31, 2007                                   | $5.57                                | $0.22                        | $0.07                                      | $0.29                            |   |
| Year ended December 31, 2006                                   | $5.55                                | $0.19                        | $0.02                                      | $0.21                            |   |
| Year ended December 31, 2005                                   | $5.65                                | $0.17                        | $(0.10)                                    | $0.07                            |   |
| Year ended December 31, 2004                                   | $5.77                                | $0.15                        | $(0.12)                                    | $0.03                            |   |
| **Davis Government Money Market Fund Class A, B, C, & Y:** |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $1.000                               | $0.002                       | $–                                   | $0.002                           |   |
| Year ended December 31, 2008                                   | $1.000                               | $0.022                       | $–                                   | $0.022                           |   |
| Year ended December 31, 2007                                   | $1.000                               | $0.046                       | $–                                   | $0.046                           |   |
| Year ended December 31, 2006                                   | $1.000                               | $0.044                       | $–                                   | $0.044                           |   |
| Year ended December 31, 2005                                   | $1.000                               | $0.026                       | $–                                   | $0.026                           |   |
| Year ended December 31, 2004                                   | $1.000                               | $0.008                       | $–                                   | $0.008                           |   |
| **Davis Financial Fund Class A:**                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $19.72                               | $0.10e                       | $2.84                                      | $2.94                            |   |
| Year ended December 31, 2008                                   | $40.71                               | $0.16e                       | $(19.02)                                   | $(18.86)                         |   |
| Year ended December 31, 2007                                   | $47.48                               | $0.20                        | $(2.56)                                    | $(2.36)                          |   |
| Year ended December 31, 2006                                   | $42.40                               | $0.04                        | $7.81                                      | $7.85                            |   |
| Year ended December 31, 2005                                   | $41.00                               | $0.04                        | $3.27                                      | $3.31                            |   |
| Year ended December 31, 2004                                   | $36.57                               | $0.02                        | $4.41                                      | $4.43                            |   |
| **Davis Financial Fund Class B:**                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $17.17                               | $(0.02)e                     | $2.45                                      | $2.43                            |   |
| Year ended December 31, 2008                                   | $36.03                               | $(0.14)e                     | $(16.75)                                   | $(16.89)                         |   |
| Year ended December 31, 2007                                   | $42.82                               | $(0.20)e                     | $(2.28)                                    | $(2.48)                          |   |
| Year ended December 31, 2006                                   | $38.83                               | $(0.33)e                     | $7.09                                      | $6.76                            |   |
| Year ended December 31, 2005                                   | $38.03                               | $(0.29)e                     | $3.00                                      | $2.71                            |   |
| Year ended December 31, 2004                                   | $34.22                               | $(0.33)                      | $4.14                                      | $3.81                            |   |
| **Davis Financial Fund Class C:**                              |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                                | $17.58                               | $0.01e                       | $2.52                                      | $2.53                            |   |
| Year ended December 31, 2008                                   | $36.77                               | $(0.11)e                     | $(17.11)                                   | $(17.22)                         |   |
| Year ended December 31, 2007                                   | $43.58                               | $(0.18)e                     | $(2.32)                                    | $(2.50)                          |   |
| Year ended December 31, 2006                                   | $39.46                               | $(0.32)e                     | $7.21                                      | $6.89                            |   |
| Year ended December 31, 2005                                   | $38.62                               | $(0.30)e                     | $3.05                                      | $2.75                            |   |
| Year ended December 31, 2004                                   | $34.75                               | $(0.32)                      | $4.19                                      | $3.87                            |   |

 

 

 

59

 

 

----

| **Financial Highlights – (Continued)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|-------------------|---------------------|---------------------------------------|----------------------|-------------------------------------------------|---------------------|--------------------|-------------------------------------------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|                   Dividends and                        Distribution                                                                                          Ratios                        to Average Net Assets |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| Dividends from Net Investment Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Distributions from

 Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End

 of Period | Total

 Returna | Net Assets, End of Period (in

 thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income

 (Loss) Ratio | Portfolio Turnoverc |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.07)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.07)             | $5.66                                 | 1.38%                | $44,615                                         | 1.58%f              | 1.58%f             | 2.41%f                                    | 16.50%              |   |
| $(0.15)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.15)             | $5.65                                 | 3.63%                | $39,261                                         | 1.63%               | 1.63%              | 2.53%                                     | 66.56%              |   |
| $(0.17)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.17)             | $5.60                                 | 4.66%                | $14,754                                         | 1.75%               | 1.75%              | 3.23%                                     | 60.23%              |   |
| $(0.14)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.14)             | $5.52                                 | 2.78%                | $7,483                                          | 1.79%               | 1.79%              | 2.56%                                     | 64.94%              |   |
| $(0.12)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.12)             | $5.51                                 | 0.29%                | $5,358                                          | 1.84%               | 1.82%              | 1.78%                                     | 55.46%              |   |
| $(0.10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–g         | $(0.10)             | $5.61                                 | (0.34)%              | $6,688                                          | 1.93%               | 1.93%              | 1.16%                                     | 165.17%             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.10)             | $5.70                                 | 1.87%                | $1,681                                          | 0.63%f              | 0.63%f             | 3.36%f                                    | 16.50%              |   |
| $(0.20)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.20)             | $5.69                                 | 4.43%                | $1,626                                          | 0.82%               | 0.82%              | 3.34%                                     | 66.56%              |   |
| $(0.22)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.22)             | $5.64                                 | 5.32%                | $410                                            | 0.99%               | 0.99%              | 3.99%                                     | 60.23%              |   |
| $(0.19)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.19)             | $5.57                                 | 3.86%                | $302                                            | 0.93%               | 0.93%              | 3.42%                                     | 64.94%              |   |
| $(0.17)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–          | $(0.17)             | $5.55                                 | 1.22%                | $115                                            | 0.98%               | 0.97%              | 2.63%                                     | 55.46%              |   |
| $(0.15)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $–                                 | $–g         | $(0.15)             | $5.65                                 | 0.61%                | $219                                            | 1.02%               | 1.02%              | 2.07%                                     | 165.17%             |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.002)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.002)            | $1.000                                | 0.24%                | $361,726                                        | 0.63%f              | 0.57%f             | 0.49%f                                    | NA                  |   |
| $(0.022)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.022)            | $1.000                                | 2.26%                | $395,211                                        | 0.57%               | 0.57%              | 2.30%                                     | NA                  |   |
| $(0.046)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.046)            | $1.000                                | 4.69%                | $596,446                                        | 0.55%               | 0.55%              | 4.59%                                     | NA                  |   |
| $(0.044)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.044)            | $1.000                                | 4.47%                | $558,107                                        | 0.56%               | 0.56%              | 4.41%                                     | NA                  |   |
| $(0.026)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.026)            | $1.000                                | 2.68%                | $513,221                                        | 0.57%               | 0.56%              | 2.65%                                     | NA                  |   |
| $(0.008)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.008)            | $1.000                                | 0.83%                | $572,381                                        | 0.58%               | 0.58%              | 0.83%                                     | NA                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $22.66                                | 14.91%h              | $482,955                                        | 1.18%f              | 1.18%f             | 1.00%f                                    | 6.85%               |   |
| $(0.16)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(1.97)                                  | $–          | $(2.13)             | $19.72                                | (45.62)%             | $425,854                                        | 1.06%               | 1.06%              | 0.50%                                     | 9.02%               |   |
| $(0.10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $(4.31)                                  | $–          | $(4.41)             | $40.71                                | (5.31)%              | $740,235                                        | 0.97%               | 0.97%              | 0.44%                                     | 15.11%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(2.77)                                  | $–          | $(2.77)             | $47.48                                | 18.74%               | $818,054                                        | 0.98%               | 0.98%              | 0.09%                                     | 4.20%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.91)                                  | $–          | $(1.91)             | $42.40                                | 8.03%                | $613,683                                        | 0.99%               | 0.98%              | 0.10%                                     | 5.17%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $41.00                                | 12.11%               | $583,387                                        | 1.01%               | 1.01%              | 0.05%                                     | –%            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $19.60                                | 14.15%h              | $13,029                                         | 2.39%f              | 2.39%f             | (0.21)%f                                  | 6.85%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.97)                                  | $–          | $(1.97)             | $17.17                                | (46.13)%             | $14,236                                         | 2.08%               | 2.08%              | (0.52)%                                   | 9.02%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(4.31)                                  | $–          | $(4.31)             | $36.03                                | (6.17)%              | $50,341                                         | 1.87%               | 1.87%              | (0.46)%                                   | 15.11%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(2.77)                                  | $–          | $(2.77)             | $42.82                                | 17.65%               | $95,545                                         | 1.88%               | 1.88%              | (0.81)%                                   | 4.20%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.91)                                  | $–          | $(1.91)             | $38.83                                | 7.08%                | $192,049                                        | 1.88%               | 1.85%              | (0.77)%                                   | 5.17%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $38.03                                | 11.13%               | $276,945                                        | 1.88%               | 1.88%              | (0.82)%                                   | –%            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $20.11                                | 14.39%h              | $62,851                                         | 2.10%f              | 2.10%f             | 0.08%f                                    | 6.85%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.97)                                  | $–          | $(1.97)             | $17.58                                | (46.09)%             | $58,474                                         | 1.94%               | 1.94%              | (0.38)%                                   | 9.02%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(4.31)                                  | $–          | $(4.31)             | $36.77                                | (6.10)%              | $87,216                                         | 1.83%               | 1.83%              | (0.42)%                                   | 15.11%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(2.77)                                  | $–          | $(2.77)             | $43.58                                | 17.70%               | $96,478                                         | 1.85%               | 1.85%              | (0.78)%                                   | 4.20%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.91)                                  | $–          | $(1.91)             | $39.46                                | 7.07%                | $94,512                                         | 1.87%               | 1.85%              | (0.77)%                                   | 5.17%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $–            | $38.62                                | 11.14%               | $104,508                                        | 1.89%               | 1.89%              | (0.83)%                                   | –%            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                          |                   |                     |                                       |                      |                                                 |                     |                    |                                           |                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

60

 

 

----

| **DAVIS SERIES, INC.**                            |                                 |                         |                                       |                             |
|---------------------------------------------------|--------------------------------------|------------------------------|--------------------------------------------|----------------------------------|
|                                              |                                 |                         |                                       |                             |
| Income (Loss) from Investment Operations          |                                 |                         |                                       |                             |
|                                              | Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations |   |
| **Davis Financial Fund Class Y:**                 |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $20.16                               | $0.11e                       | $2.90                                      | $3.01                            |   |
| Year ended December 31, 2008                      | $41.57                               | $0.20e                       | $(19.44)                                   | $(19.24)                         |   |
| Year ended December 31, 2007                      | $48.38                               | $0.28                        | $(2.61)                                    | $(2.33)                          |   |
| Year ended December 31, 2006                      | $43.10                               | $0.11                        | $7.94                                      | $8.05                            |   |
| Year ended December 31, 2005                      | $41.59                               | $0.09                        | $3.33                                      | $3.42                            |   |
| Year ended December 31, 2004                      | $37.03                               | $0.09                        | $4.47                                      | $4.56                            |   |
| **Davis Appreciation & Income Fund Class A:** |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $16.15                               | $0.21e                       | $2.84                                      | $3.05                            |   |
| Year ended December 31, 2008                      | $28.21                               | $0.54e                       | $(12.06)                                   | $(11.52)                         |   |
| Year ended December 31, 2007                      | $29.71                               | $0.61                        | $(0.18)                                    | $0.43                            |   |
| Year ended December 31, 2006                      | $27.94                               | $0.68                        | $3.52                                      | $4.20                            |   |
| Year ended December 31, 2005                      | $27.50                               | $0.59                        | $1.11                                      | $1.70                            |   |
| Year ended December 31, 2004                      | $24.95                               | $0.65                        | $2.57                                      | $3.22                            |   |
| **Davis Appreciation & Income Fund Class B:** |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $15.98                               | $0.13e                       | $2.81                                      | $2.94                            |   |
| Year ended December 31, 2008                      | $27.90                               | $0.33e                       | $(11.92)                                   | $(11.59)                         |   |
| Year ended December 31, 2007                      | $29.40                               | $0.38e                       | $(0.21)                                    | $0.17                            |   |
| Year ended December 31, 2006                      | $27.67                               | $0.45e                       | $3.46                                      | $3.91                            |   |
| Year ended December 31, 2005                      | $27.25                               | $0.35                        | $1.08                                      | $1.43                            |   |
| Year ended December 31, 2004                      | $24.72                               | $0.41                        | $2.54                                      | $2.95                            |   |
| **Davis Appreciation & Income Fund Class C:** |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $16.24                               | $0.14e                       | $2.85                                      | $2.99                            |   |
| Year ended December 31, 2008                      | $28.34                               | $0.35e                       | $(12.10)                                   | $(11.75)                         |   |
| Year ended December 31, 2007                      | $29.84                               | $0.38e                       | $(0.20)                                    | $0.18                            |   |
| Year ended December 31, 2006                      | $28.06                               | $0.45e                       | $3.51                                      | $3.96                            |   |
| Year ended December 31, 2005                      | $27.62                               | $0.36                        | $1.10                                      | $1.46                            |   |
| Year ended December 31, 2004                      | $25.06                               | $0.42                        | $2.57                                      | $2.99                            |   |
| **Davis Appreciation & Income Fund Class Y:** |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $16.22                               | $0.24e                       | $2.85                                      | $3.09                            |   |
| Year ended December 31, 2008                      | $28.33                               | $0.61e                       | $(12.11)                                   | $(11.50)                         |   |
| Year ended December 31, 2007                      | $29.84                               | $0.72e                       | $(0.22)                                    | $0.50                            |   |
| Year ended December 31, 2006                      | $28.05                               | $0.76                        | $3.54                                      | $4.30                            |   |
| Year ended December 31, 2005                      | $27.61                               | $0.66                        | $1.11                                      | $1.77                            |   |
| Year ended December 31, 2004                      | $25.04                               | $0.71                        | $2.58                                      | $3.29                            |   |
| **Davis Real Estate Fund Class A:**               |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d                   | $15.29                               | $0.26e                       | $(1.27)                                    | $(1.01)                          |   |
| Year ended December 31, 2008                      | $30.50                               | $0.42e                       | $(14.70)                                   | $(14.28)                         |   |
| Year ended December 31, 2007                      | $46.42                               | $0.81e                       | $(7.45)                                    | $(6.64)                          |   |
| Year ended December 31, 2006                      | $40.23                               | $0.61e                       | $13.28                                     | $13.89                           |   |
| Year ended December 31, 2005                      | $39.52                               | $0.59                        | $4.37                                      | $4.96                            |   |
| Year ended December 31, 2004                      | $30.32                               | $0.64                        | $9.32                                      | $9.96                            |   |

 

 

61

 

 

----

| **Financial Highlights – (Continued)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|-------------------|---------------------|---------------------------------------|----------------------|-------------------------------------------------|---------------------|--------------------|-------------------------------------------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|                  Dividends and                        Distribution                                                                                          Ratios                        to Average Net Assets |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| Dividends from Net Investment Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | Distributions from

 Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End

 of Period | Total

 Returna | Net Assets, End of Period (in

 thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income

 (Loss) Ratio | Portfolio Turnoverc |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $–                                 | $–          | $–            | $23.17                                | 14.93%h              | $10,320                                         | 1.09%f              | 1.09%f             | 1.09%f                                    | 6.85%               |   |
| $(0.20)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.97)                                  | $–          | $(2.17)             | $20.16                                | (45.56)%             | $8,958                                          | 0.97%               | 0.97%              | 0.59%                                     | 9.02%               |   |
| $(0.17)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(4.31)                                  | $–          | $(4.48)             | $41.57                                | (5.15)%              | $8,844                                          | 0.84%               | 0.84%              | 0.57%                                     | 15.11%              |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $(2.77)                                  | $–          | $(2.77)             | $48.38                                | 18.90%               | $10,566                                         | 0.84%               | 0.84%              | 0.23%                                     | 4.20%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $(1.91)                                  | $–          | $(1.91)             | $43.10                                | 8.18%                | $11,815                                         | 0.85%               | 0.84%              | 0.24%                                     | 5.17%               |   |
| $–                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $–                                 | $–          | $–            | $41.59                                | 12.31%               | $9,980                                          | 0.85%               | 0.85%              | 0.21%                                     | –%            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.08)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.08)             | $19.12                                | 18.99%               | $236,118                                        | 1.19%f              | 1.19%f             | 2.56%f                                    | 6.39%               |   |
| $(0.54)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.54)             | $16.15                                | (41.43)%             | $227,940                                        | 1.07%               | 1.07%              | 2.24%                                     | 27.60%              |   |
| $(0.60)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.33)                                  | $–          | $(1.93)             | $28.21                                | 1.30%                | $567,728                                        | 1.01%               | 1.01%              | 2.04%                                     | 23.26%              |   |
| $(0.64)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.79)                                  | $–          | $(2.43)             | $29.71                                | 15.19%               | $393,888                                        | 1.06%               | 1.06%              | 2.35%                                     | 25.33%              |   |
| $(0.62)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(0.64)                                  | $–          | $(1.26)             | $27.94                                | 6.29%                | $224,600                                        | 1.07%               | 1.07%              | 2.12%                                     | 16.64%              |   |
| $(0.67)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.67)             | $27.50                                | 13.08%               | $149,687                                        | 1.08%               | 1.08%              | 2.52%                                     | 21.26%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.04)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.04)             | $18.88                                | 18.48%               | $17,323                                         | 2.15%f              | 2.15%f             | 1.60%f                                    | 6.39%               |   |
| $(0.33)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.33)             | $15.98                                | (41.92)%             | $16,891                                         | 1.93%               | 1.93%              | 1.38%                                     | 27.60%              |   |
| $(0.34)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.33)                                  | $–          | $(1.67)             | $27.90                                | 0.46%                | $44,099                                         | 1.84%               | 1.84%              | 1.21%                                     | 23.26%              |   |
| $(0.39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.79)                                  | $–          | $(2.18)             | $29.40                                | 14.20%               | $51,102                                         | 1.89%               | 1.89%              | 1.52%                                     | 25.33%              |   |
| $(0.37)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(0.64)                                  | $–          | $(1.01)             | $27.67                                | 5.30%                | $75,289                                         | 1.94%               | 1.93%              | 1.26%                                     | 16.64%              |   |
| $(0.42)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.42)             | $27.25                                | 12.06%               | $80,729                                         | 1.99%               | 1.99%              | 1.61%                                     | 21.26%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.05)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.05)             | $19.18                                | 18.47%               | $77,866                                         | 2.03%f              | 2.03%f             | 1.72%f                                    | 6.39%               |   |
| $(0.35)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.35)             | $16.24                                | (41.85)%             | $79,699                                         | 1.87%               | 1.87%              | 1.44%                                     | 27.60%              |   |
| $(0.35)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.33)                                  | $–          | $(1.68)             | $28.34                                | 0.50%                | $169,456                                        | 1.80%               | 1.80%              | 1.25%                                     | 23.26%              |   |
| $(0.39)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.79)                                  | $–          | $(2.18)             | $29.84                                | 14.22%               | $90,692                                         | 1.88%               | 1.87%              | 1.54%                                     | 25.33%              |   |
| $(0.38)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(0.64)                                  | $–          | $(1.02)             | $28.06                                | 5.34%                | $55,395                                         | 1.93%               | 1.93%              | 1.26%                                     | 16.64%              |   |
| $(0.43)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.43)             | $27.62                                | 12.05%               | $34,627                                         | 1.98%               | 1.98%              | 1.62%                                     | 21.26%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.09)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.09)             | $19.22                                | 19.18%               | $44,419                                         | 0.92%f              | 0.92%f             | 2.83%f                                    | 6.39%               |   |
| $(0.61)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.61)             | $16.22                                | (41.25)%             | $49,314                                         | 0.79%               | 0.79%              | 2.52%                                     | 27.60%              |   |
| $(0.68)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.33)                                  | $–          | $(2.01)             | $28.33                                | 1.55%                | $105,327                                        | 0.75%               | 0.74%              | 2.31%                                     | 23.26%              |   |
| $(0.72)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(1.79)                                  | $–          | $(2.51)             | $29.84                                | 15.49%               | $50,052                                         | 0.80%               | 0.80%              | 2.61%                                     | 25.33%              |   |
| $(0.69)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(0.64)                                  | $–          | $(1.33)             | $28.05                                | 6.52%                | $37,110                                         | 0.83%               | 0.83%              | 2.36%                                     | 16.64%              |   |
| $(0.72)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.72)             | $27.61                                | 13.35%               | $30,260                                         | 0.86%               | 0.86%              | 2.74%                                     | 21.26%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.08)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.08)             | $14.20                                | (6.44)%              | $178,222                                        | 1.54%f              | 1.54%f             | 4.01%f                                    | 43.19%              |   |
| $(0.09)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(0.51)                                  | $(0.33)           | $(0.93)             | $15.29                                | (46.89)%             | $202,878                                        | 1.23%               | 1.23%              | 1.62%                                     | 43.68%              |   |
| $(0.58)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(8.70)                                  | $–          | $(9.28)             | $30.50                                | (14.87)%             | $460,644                                        | 1.08%               | 1.08%              | 1.84%                                     | 46.37%              |   |
| $(0.88)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(6.82)                                  | $–          | $(7.70)             | $46.42                                | 34.58%               | $573,375                                        | 1.09%               | 1.09%              | 1.37%                                     | 37.97%              |   |
| $(0.83)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $(3.42)                                  | $–          | $(4.25)             | $40.23                                | 12.76%               | $372,571                                        | 1.10%               | 1.09%              | 1.48%                                     | 24.86%              |   |
| $(0.76)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $–                                 | $–          | $(0.76)             | $39.52                                | 33.22%               | $313,378                                        | 1.26%               | 1.26%              | 1.93%                                     | 31.37%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                          |                   |                     |                                       |                      |                                                 |                     |                    |                                           |                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

62

 

 

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| **DAVIS SERIES, INC.**                   |                                 |                         |                                       |                             |
|------------------------------------------|--------------------------------------|------------------------------|--------------------------------------------|----------------------------------|
|                                     |                                 |                         |                                       |                             |
| Income (Loss) from Investment Operations |                                 |                         |                                       |                             |
|                                     | Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) | Total from Investment Operations |   |
| **Davis Real Estate Fund Class B:**      |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d          | $15.13                               | $0.18e                       | $(1.24)                                    | $(1.06)                          |   |
| Year ended December 31, 2008             | $30.29                               | $0.21e                       | $(14.63)                                   | $(14.42)                         |   |
| Year ended December 31, 2007             | $46.16                               | $0.53e                       | $(7.46)                                    | $(6.93)                          |   |
| Year ended December 31, 2006             | $40.05                               | $0.38e                       | $13.07                                     | $13.45                           |   |
| Year ended December 31, 2005             | $39.36                               | $0.30                        | $4.34                                      | $4.64                            |   |
| Year ended December 31, 2004             | $30.20                               | $0.43                        | $9.26                                      | $9.69                            |   |
| **Davis Real Estate Fund Class C:**      |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d          | $15.32                               | $0.21e                       | $(1.26)                                    | $(1.05)                          |   |
| Year ended December 31, 2008             | $30.63                               | $0.24e                       | $(14.79)                                   | $(14.55)                         |   |
| Year ended December 31, 2007             | $46.56                               | $0.52e                       | $(7.50)                                    | $(6.98)                          |   |
| Year ended December 31, 2006             | $40.35                               | $0.44e                       | $13.12                                     | $13.56                           |   |
| Year ended December 31, 2005             | $39.63                               | $0.31                        | $4.37                                      | $4.68                            |   |
| Year ended December 31, 2004             | $30.41                               | $0.43                        | $9.33                                      | $9.76                            |   |
| **Davis Real Estate Fund Class Y:**      |                                 |                         |                                       |                             |   |
| Six months ended June 30, 2009d          | $15.46                               | $0.29e                       | $(1.28)                                    | $(0.99)                          |   |
| Year ended December 31, 2008             | $30.82                               | $0.50e                       | $(14.85)                                   | $(14.35)                         |   |
| Year ended December 31, 2007             | $46.81                               | $0.92e                       | $(7.47)                                    | $(6.55)                          |   |
| Year ended December 31, 2006             | $40.53                               | $0.77                        | $13.37                                     | $14.14                           |   |
| Year ended December 31, 2005             | $39.78                               | $0.74                        | $4.42                                      | $5.16                            |   |
| Year ended December 31, 2004             | $30.51                               | $0.82                        | $9.37                                      | $10.19                           |   |

 

 

 

| a | Assumes hypothetical initial investment on the business day before the first day of the fiscal period, with all dividends and distributions reinvested in additional shares on the reinvestment date, and redemption at the net asset value calculated on the last business day of the fiscal period. Sales charges are not reflected in the total returns.                            Total returns are not annualized for periods of less than one year. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| b | The ratios in this column reflect the impact, if any, of the reduction of expenses paid indirectly and of certain reimbursements and/or waivers from the Adviser.                                                                                                                                                                                                                                                                                          |
| c | The lesser of purchases or sales of portfolio securities for a period, divided by the monthly average of the market value of portfolio securities owned during the period. Securities with a maturity or expiration date at the time of acquisition of one year or less are excluded from the calculation.                                                                                                                                                 |
| d | Unaudited.                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

 

 

63

 

 

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| **Financial Highlights – (Continued)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|-------------------|---------------------|---------------------------------------|----------------------|-------------------------------------------------|---------------------|--------------------|-------------------------------------------|---------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
|                  Dividends and                        Distribution                                                                                          Ratios                        to Average Net Assets |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| Dividends from Net Investment Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Distributions from

 Realized Gains | Return of Capital | Total Distributions | Net Asset Value, End

 of Period | Total

 Returna | Net Assets, End of Period (in

 thousands) | Gross Expense Ratio | Net Expense Ratiob | Net Investment Income

 (Loss) Ratio | Portfolio Turnoverc |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.05)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.05)             | $14.02                                | (6.92)%              | $5,586                                          | 2.71%f              | 2.71%f             | 2.84%f                                    | 43.19%              |   |
| $(0.05)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(0.51)                                  | $(0.18)           | $(0.74)             | $15.13                                | (47.41)%             | $7,581                                          | 2.13%               | 2.13%              | 0.72%                                     | 43.68%              |   |
| $(0.24)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(8.70)                                  | $–          | $(8.94)             | $30.29                                | (15.52)%             | $24,872                                         | 1.87%               | 1.87%              | 1.05%                                     | 46.37%              |   |
| $(0.52)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(6.82)                                  | $–          | $(7.34)             | $46.16                                | 33.50%               | $55,347                                         | 1.86%               | 1.86%              | 0.60%                                     | 37.97%              |   |
| $(0.53)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(3.42)                                  | $–          | $(3.95)             | $40.05                                | 11.91%               | $87,039                                         | 1.89%               | 1.88%              | 0.69%                                     | 24.86%              |   |
| $(0.53)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.53)             | $39.36                                | 32.34%               | $125,550                                        | 1.94%               | 1.94%              | 1.25%                                     | 31.37%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.06)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.06)             | $14.21                                | (6.76)%              | $23,293                                         | 2.40%f              | 2.40%f             | 3.15%f                                    | 43.19%              |   |
| $(0.05)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(0.51)                                  | $(0.20)           | $(0.76)             | $15.32                                | (47.33)%             | $28,789                                         | 2.00%               | 2.00%              | 0.85%                                     | 43.68%              |   |
| $(0.25)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(8.70)                                  | $–          | $(8.95)             | $30.63                                | (15.48)%             | $73,594                                         | 1.84%               | 1.84%              | 1.08%                                     | 46.37%              |   |
| $(0.53)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(6.82)                                  | $–          | $(7.35)             | $46.56                                | 33.54%               | $119,093                                        | 1.84%               | 1.84%              | 0.62%                                     | 37.97%              |   |
| $(0.54)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(3.42)                                  | $–          | $(3.96)             | $40.35                                | 11.93%               | $95,229                                         | 1.88%               | 1.87%              | 0.70%                                     | 24.86%              |   |
| $(0.54)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.54)             | $39.63                                | 32.37%               | $86,835                                         | 1.93%               | 1.93%              | 1.26%                                     | 31.37%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                     |              |                |                                  |                 |                                            |                |               |                                      |                |   |
| $(0.09)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.09)             | $14.38                                | (6.18)%              | $21,550                                         | 1.14%f              | 1.14%f             | 4.42%f                                    | 43.19%              |   |
| $(0.10)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(0.51)                                  | $(0.40)           | $(1.01)             | $15.46                                | (46.75)%             | $29,282                                         | 0.89%               | 0.89%              | 1.96%                                     | 43.68%              |   |
| $(0.74)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(8.70)                                  | $–          | $(9.44)             | $30.82                                | (14.58)%             | $57,995                                         | 0.75%               | 0.75%              | 2.17%                                     | 46.37%              |   |
| $(1.04)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(6.82)                                  | $–          | $(7.86)             | $46.81                                | 34.98%               | $113,856                                        | 0.74%               | 0.74%              | 1.72%                                     | 37.97%              |   |
| $(0.99)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $(3.42)                                  | $–          | $(4.41)             | $40.53                                | 13.20%               | $79,156                                         | 0.77%               | 0.77%              | 1.80%                                     | 24.86%              |   |
| $(0.92)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | $–                                 | $–          | $(0.92)             | $39.78                                | 33.85%               | $69,241                                         | 0.80%               | 0.80%              | 2.39%                                     | 31.37%              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                          |                   |                     |                                       |                      |                                                 |                     |                    |                                           |                     |        |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

 

 

| e                                       | Per share calculations were based on average shares outstanding for the period.                                                                                                                                                                             |   |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| f                                       | Annualized.                                                                                                                                                                                                                                                 |   |
| g                                       | Less than $0.005 per share.                                                                                                                                                                                                                                 |   |
| h                                       | Davis Financial Fund received a favorable class action settlement from a company that it no longer owns. This settlement had a material impact on the investment performance of the Fund in 2009. This is a one-time event that is unlikely to be repeated. |   |
| ***See Notes to Financial Statements*** |

 

 

64

 

 

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**DAVIS SERIES,            INC.**                                                                                                                                **Fund Information**

 

**Portfolio Proxy Voting Policies and Procedures**

 

The Funds have adopted Portfolio Proxy Voting Policies and Procedures under which the Funds vote proxies relating to securities held by the Funds. A description of the Funds’ Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-279-0279, (ii) on the Funds’ website at www.davisfunds.com, and (iii) on the            SEC’s website at www.sec.gov.

 

In addition, the Funds are required to file Form N-PX, with their complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Funds’ Form N-PX filing is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-279-0279, (ii) on the Funds’ website at www.davisfunds.com, and (iii) on the            SEC’s website at www.sec.gov.

 

**Form N-Q**

 

The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available without charge, upon request, by calling 1-800-279-0279 or on the Funds’ website at www.davisfunds.com or on the SEC’s website at www.sec.gov. The Funds’ Form N-Q may be reviewed and copied at the            SEC’s Public Reference Room in Washington, DC, and that information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

 

65

 

 

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**DAVIS SERIES,            INC.**                                                                                  **Director Approval of Advisory Agreements**

 

**Process of Annual Review**

 

The Board of Directors of the Davis Funds oversees the management of each Davis Fund and, as required by law, determines annually whether to approve the continuance of each Davis Fund's advisory agreement with Davis Selected Advisers, L.P. and sub-advisory agreement with Davis Selected Advisers-NY, Inc. (jointly “Davis Advisors” and “Advisory Agreements”). 

 

As a part of this process the Independent Directors, with the assistance of counsel for the Independent Directors, prepared questions submitted to Davis Advisors in anticipation of the annual contract review. The Independent Directors were provided with responsive background material (including recent investment performance data), and their counsel provided guidance, prior to a separate contract            review meeting held in March 2009 where the Independent Directors reviewed and evaluated all information which they deemed reasonably necessary in the circumstances. Upon completion of this review, the Independent Directors found that the terms of the Advisory Agreements are fair and reasonable and that continuation of the Advisory Agreements was in the best interest of Davis Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis            Government Bond Fund, and Davis Government Money Market Fund, and their shareholders.

 

**Reasons the Independent Directors Approved Continuation of the Advisory Agreements**

 

The Independent Directors’ determinations were based upon a comprehensive consideration of all information provided to the Independent Directors and were not the result of any single factor. The following facts and conclusions were important, but not exclusive, in the Independent Directors’ recommendation to renew the Advisory Agreements.

 

The Independent Directors considered not only the investment performance of each Fund, but also the full range and quality of services provided by Davis Advisors to each Fund and their shareholders, including whether it:

 

|   | 1. | Achieves satisfactory investment results over the long-term after all costs; |
|--------|----|------------------------------------------------------------------------------|

|   | 2. | Handles shareholder transactions, inquiries, requests, and records efficiently and effectively, and provides quality accounting, legal, and compliance services, and oversight of third party service providers; and |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Fosters healthy investor behavior. |
|--------|----|------------------------------------|

 

Davis Advisors is reimbursed a portion of its costs in providing some, but not all, of these services.

 

A shareholder’s ultimate return is the product of a fund’s results as well as the shareholder’s behavior, specifically in selecting when to invest or redeem. The Independent Directors concluded that, through its actions and communications, Davis Advisors has attempted to have a meaningful, positive impact on investor behavior.

 

Davis Advisors and members of the Davis family are some of the largest shareholders in the Davis Funds. The Independent Directors concluded that this investment tends to align Davis Advisors’ and the Davis family’s interests with other shareholders, as they face the same risks, pay the same fees, and are highly motivated to achieve satisfactory long-term returns. In addition, the            Independent Directors concluded that significant investments by Davis Advisors and the Davis family have contributed to the economies of scale which have lowered fees and expenses for Davis Funds’ shareholders over time.

 

The Independent Directors noted the importance of reviewing quantitative measures, but also recognized that qualitative factors are also important in assessing whether Davis Fund shareholders are likely to be well served by the renewal of the Advisory Agreements. They noted both the value and shortcomings of purely quantitative measures, including the data provided by independent service providers,            and concluded that while such measures and data may be informative, the judgment of the Independent Directors must take many factors, including those listed below, into consideration in representing the shareholders of the Davis Funds. In connection with reviewing comparative performance information, the Independent Directors generally give weight to longer-term measurements.

 

The Independent Directors expect Davis Advisors to employ a disciplined, company-specific, research-driven, businesslike, long-term investment philosophy. 

 

66

 

 

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**DAVIS SERIES,            INC.**                                                         **Director Approval of Advisory Agreements – (Continued)**

 

**Reasons the Independent Directors Approved Continuation of the Advisory Agreements – (Continued)**

 

The Independent Directors recognized Davis Advisors’ (a) efforts to minimize transaction costs by generally having a long-term time horizon and low portfolio turnover; (b) focus on tax efficiency; (c) record of generally producing satisfactory after-tax results over longer-term periods; (d) efforts towards fostering healthy investor behavior by, among other things, providing informative and            substantial educational material; and (e) efforts to promote shareholder interests by actively speaking out on corporate governance issues. 

 

The Independent Directors reviewed (a) comparative fee and expense information for other funds, as selected and analyzed by a nationally recognized independent service provider; (b) information regarding fees charged by Davis Advisors to other advisory clients, including funds which it sub-advises and private accounts, as well as the differences in the services provided to such other clients; and (c)            the fee schedules of each of the Funds, including an assessment of competitive fee schedules, and review of breakpoints if applicable. 

 

The Independent Directors reviewed the management fee schedule for each Fund and the profitability of each Fund to Davis Advisors, the extent to which economies of scale might be realized if any of the Funds’ net assets increased, and whether the fee schedule reflected those potential economies of scale. The Independent Directors considered the nature, quality and extent of the services being            provided to each Fund and the costs incurred by Davis Advisors in providing such services. The Independent Directors considered various potential benefits that Davis Advisors may receive in connection with the services it provides under the Advisory Agreements with the Funds, including a review of portfolio brokerage practices. The Independent Directors noted that Davis Advisors does not use client commissions to pay for publications that are available to the general public or for            third-party research services. 

 

**Davis Opportunity Fund**

 

The Independent Directors noted that Davis Opportunity Fund had under-performed its benchmark, the Russell 3000® Index, over the one-, three-, and five-year time periods and out-performed over the ten-year time period, all ended February 28, 2009. A report produced by an independent service provider indicated that the Fund trailed its peer group over the one-, three-, and five-year time            periods, while out-performing over the ten-year time period, all ended December 31, 2008. The Independent Directors noted that the Fund out-performed both the Russell 3000® Index and its peer group in 5 of the 6 rolling five calendar year time frames beginning when Davis Advisors assumed responsibility for daily management of the Fund (January 1999) through December 31, 2008. 

 

The Independent Directors considered the management fee and total expense ratio for Davis Opportunity Fund. The management fee and total expense ratio were lower than the average ratios of its peer group as determined by an independent service provider. 

 

**Davis Financial Fund**

 

The Independent Directors noted that Davis Financial Fund had under-performed its benchmark, the Standard & Poor’s 500® Index, over the one-, three- and five-year time periods, and out-performed its benchmark over the ten-year time period, all ended February 28, 2009. A report produced by an independent service provider indicated that the Fund had out-performed its peer group            over the three-, five-, and ten-year time periods and under-performed over the one-year time period, all ended December 31, 2008. The Independent Directors noted that the Fund out-performed the S&P 500® Index in 11 of the 13 rolling five calendar year time frames ended December 31, 1996 through December 31, 2008, and in all 8 rolling ten calendar year time frames ended December 31, 2001 through December 31, 2008. The Independent Directors noted that the Fund            out-performed its peer group in 6 of the 13 rolling five calendar year time frames, and in 7 of the 8 rolling ten calendar year time frames.

 

The Independent Directors considered the management fee and total expense ratio for Davis Financial Fund. The management fee and total expense ratio were lower than the average ratios of its peer group as determined by an independent service provider. 

 

67

 

 

----

**DAVIS SERIES,            INC.**                                                         **Director Approval of Advisory Agreements – (Continued)**

 

**Davis Real Estate Fund**

 

The Independent Directors noted that Davis Real Estate Fund had slightly under-performed its benchmark, the Wilshire U.S. Real Estate Securities Index (formerly Dow Jones Wilshire Real Estate Securities Index), over the five- and ten-year time periods, and approximately matched the Index over the one- and three-year time periods, all ended February 28, 2009. A report produced by an independent service            provider indicated that the Fund under-performed its peer group over the one-, three-, five-, and ten-year time periods ended December 31, 2008. The Independent Directors noted that the Fund out-performed the Wilshire U.S. Real Estate Securities Index and its peer group in 4 of the 11 rolling five calendar year time frames ended December 31, 1998 through December 31, 2008, and in 1 of 6 rolling ten calendar year time frames ended December 31, 2003 through December 31, 2008.            

 

The Independent Directors considered the management fee and total expense ratio for Davis Real Estate Fund. The management fee and total expense ratio were lower than the average ratios of its peer group as determined by an independent service provider. 

 

**Davis Appreciation & Income Fund**

 

The Independent Directors noted that Davis Appreciation & Income Fund had under-performed its benchmark, the Standard & Poor’s 500® Index, over the one-, three-, and five-year time periods, and out-performed the Index over the ten-year time period, all ended February 28, 2009. A report produced by an independent service provider indicated that the Fund            under-performed its peer group over the one-, three-, five-, and ten-year time periods ended December 31, 2008. The Independent Directors noted that the Fund out-performed the S&P 500® Index in 5 of the 12 rolling five calendar year time frames ended December 31, 1997 through December 31, 2008, and in 4 of the 7 rolling ten calendar year time frames ended December 31, 2002 through December 31, 2008. The Independent Directors noted that the Fund out-performed its            peer group in 8 of the 12 rolling five calendar year time frames, and in 5 of the 7 rolling ten calendar year time frames.

 

The Independent Directors considered the management fee and total expense ratio for Davis Appreciation & Income Fund. The management fee was higher than the average of the peer group but the total expense ratio was slightly lower. Both were competitive with the range of average ratios of its peer group as determined by an independent service provider. 

 

**Davis Government Bond Fund**

 

The Independent Directors noted that Davis Government Bond Fund had under-performed its benchmark, the Citigroup U.S. Treasury/Agency 1-3 Year Index, over the one-, three-, five-, and ten-year time periods ended February 28, 2009. A report produced by an independent service provider indicated that the Fund out-performed its peer group over the one-, three-, and five-year time periods and            under-performed over the ten-year time period, all ended December 31, 2008. The Independent Directors reviewed the Fund’s performance against both the Citigroup U.S. Treasury/Agency 1-3 Year Index and its peer group for 10 rolling five calendar year time frames ended December 31, 1999 through December 31, 2008, and 5 rolling ten calendar year time frames ended December 31, 2004 through December 31, 2008. The Independent Directors noted that, while in no period did the Fund            beat its benchmark, the Fund out-performed its peer group in 3 of the rolling five calendar year time frames and none of the rolling ten calendar year time frames.

 

The Independent Directors considered the management fee and total expense ratio for Davis Government Bond Fund. The management fee was below the average of the peer group and the total expense ratio was approximately equal to the average of the peer group. Both were competitive with the range of average ratios of its peer group as determined by an independent service provider. 

 

**Davis Government Money Market Fund**

 

The Independent Directors noted that a report produced by an independent service provider indicated that the Fund out-performed its peer group over all time periods. 

 

The Independent Directors considered the management fee and total expense ratio for Davis Government Money Market Fund. While both fees were higher than the average of its peer group as reported by an independent service provider, they were within the range of the peers and the net performance was good.

 

68

 

 

----

**DAVIS SERIES,            INC.**                                                         **Director Approval of Advisory Agreements – (Continued)**

 

**Approval of Advisory Agreements**

 

The Independent Directors concluded that Davis Advisors had provided Davis Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis Government Bond Fund, and Davis Government Money Market Fund and their shareholders a reasonable level of both investment and non-investment services. The Independent Directors further concluded that shareholders have            received a significant benefit from Davis Advisors’ shareholder-oriented approach, as well as the execution of its investment discipline. 

 

The Independent Directors determined that the advisory fees for Davis Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund, Davis Appreciation & Income Fund, Davis Government Bond Fund, and Davis Government Money Market Fund were reasonable in light of the nature, quality and extent of the services being provided to the Funds, the costs incurred by Davis Advisors in providing such            service, and in comparison to the range of the average advisory fees of its peer group as determined by an independent service provider. The Independent Directors found that the terms of the Advisory Agreements are fair and reasonable and that continuation of the Advisory Agreements is in the best interest of each Fund and its shareholders. The Independent Directors and the full Board of Directors therefore voted to continue the Advisory Agreements.

 

**Important Developments Following Approval of the Advisory Agreement**

 

In the June 2009 Board of Directors’ meeting, Davis Advisors notified the Directors that it was voluntarily reducing the management fee of Davis Opportunity Fund, Davis Financial Fund, Davis Real Estate Fund, and Davis Appreciation & Income Fund by lowering the fee of 75 basis points on the first $250 million of assets and 65 basis points on the next $250 million of assets to 55 basis points            effective July 1, 2009. The Directors were also notified that effective May 1, 2009, the management fee for Davis Government Money Market Fund was temporarily reduced to 30 basis points until December 31, 2009.

 

 

 

 

 

 

 

 

69

 

 

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**DAVIS SERIES,            INC.**                                                                                                                      **Directors and Officers**

 

For the purposes of their service as directors to the Davis Funds, the business address for each of the directors is 2949 E. Elvira Road, Suite 101, Tucson, AZ 85756. Each Director serves until their retirement, resignation, death or removal. Subject to exceptions and exemptions, which may be granted by the Independent Directors, Directors must retire at the close of business on the last day of the            calendar year in which the Director attains age seventy-four (74).

 

| **Name**

(birthdate) | **Position(s) Held With Fund** | **Term of Office and Length of Time Served** | **Principal Occupation(s) During Past Five Years** | **Number of Portfolios in Fund Complex Overseen by Director** | **Other Directorships Held by Director** |
|-----------------------|--------------------------------|----------------------------------------------|----------------------------------------------------|---------------------------------------------------------------|------------------------------------------|
|                  |                           |                                         |                                               |                                                          |                                     |

 

***Independent Directors***

 

|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
|--------------------------------------|----------|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Marc P. Blum**

(09/09/42)         | Director | Director since 1986 | Chief Executive Officer, World Total Return Fund, LLLP; of Counsel to Gordon, Feinblatt, Rothman, Hoffberger and Hollander, LLC (law firm).                                                                                     | 13         | Director, Legg Mason Investment Counsel & Trust Company N.A. (asset management company) and Rodney Trust Company (Delaware).                                                                                              |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **John S. Gates, Jr.**

(08/02/53)   | Director | Director since 2007 | Chairman and Chief Executive Officer of PortaeCo LLC, a private investment company (beginning in 2006); Co-founder of Centerpoint Properties Trust (a REIT); Co-chairman and Chief Executive Officer for 22 years (until 2006). | 13

  | Director, DCT Industrial Trust (a REIT).                                                                                                                                                                                      |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **Thomas S. Gayner**

(12/16/61)     | Director | Director since 2004 | Executive Vice President and Chief Investment Officer, Markel Corporation (insurance company).                                                                                                                                  | 13         | Director, First Market Bank; Director, Washington Post Co. (newspaper publisher); Director, Colfax Corp. (engineering and manufacturer of pumps and fluid handling equipment).                                                |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **G. Bernard Hamilton**

(03/18/37)  | Director | Director since 1978 | Managing General Partner, Avanti Partners, L.P. (investment partnership), retired 2005.                                                                                                                                         | 13         | none                                                                                                                                                                                                                          |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **Samuel H. Iapalucci**

(07/19/52)  | Director | Director since 2006 | Former Executive Vice President and Chief Financial Officer, CH2M-Hill, Inc. (engineering).                                                                                                                                     | 13         | none                                                                                                                                                                                                                          |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **Robert P. Morgenthau**

(03/22/57) | Director | Director since 2002 | Chairman, NorthRoad Capital Management, LLC (an investment management firm) since June 2002.                                                                                                                                    | 13         | none                                                                                                                                                                                                                          |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **Christian R. Sonne**

(05/06/36)   | Director | Director since 1990 | General Partner, Tuxedo Park Associates (land holding and development firm).                                                                                                                                                    | 13         | none                                                                                                                                                                                                                          |
|                                 |     |                |                                                                                                                                                                                                                            |       |                                                                                                                                                                                                                          |
| **Marsha Williams**

(03/28/51)      | Director | Director since 1999 | Senior Vice President and Chief Financial Officer, Orbitz Worldwide, Inc. (travel-services provider) since 2007; former Executive Vice President and Chief Financial Officer, Equity Office Properties Trust (a REIT).          | 13         | Director, Modine Manufacturing, Inc. (heat transfer technology); Director, Chicago Bridge & Iron Company, N.V. (industrial construction and engineering); Director, Fifth Third Bancorp (diversified financial services). |

 

 

70

 

 

----

**DAVIS SERIES,            INC.**                                                                                             **Directors and Officers – (Continued)**

 

 

| **Name**

(birthdate) | **Position(s) Held With Fund** | **Term of Office and Length of Time Served** | **Principal Occupation(s) During Past Five Years** | **Number of Portfolios in Fund Complex Overseen by Director** | **Other Directorships Held by Director** |
|-----------------------|--------------------------------|----------------------------------------------|----------------------------------------------------|---------------------------------------------------------------|------------------------------------------|
|                  |                           |                                         |                                               |                                                          |                                     |

 

***Inside Directors****

|                            |                |                |                                                                                                                                                                                                                                                                       |   |                                                                      |
|---------------------------------|---------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|
| **Jeremy H. Biggs**

(08/16/35) | Director/

Chairman | Director since 1994 | Vice Chairman, Member of the Audit Committee and Member of the International Investment Committee, former Chief Investment Officer (1980 through 2005), all for Fiduciary Trust Company International (money management firm); Consultant to Davis Selected Advisers, L.P. | 13     | none                                                                      |
|                            |                |                |                                                                                                                                                                                                                                                                       |   |                                                                      |
| **Andrew A. Davis**

(06/25/63) | Director            | Director since 1997 | President or Vice President of each Davis Fund and Selected Fund; President, Davis Selected Advisers, L.P., and also serves as an executive officer in certain companies affiliated with the Adviser.                                                                      | 9      | Director, the Selected Funds (consisting of three portfolios) since 1998. |

 

*    Jeremy H. Biggs and Andrew A. Davis own partnership units (directly, indirectly, or both) of the Adviser and are considered to be “interested persons” of the Funds as defined in the Investment Company Act of 1940. 

 

71

 

 

----

**DAVIS SERIES,            INC.**                                                                                             **Directors and Officers – (Continued)**

 

***Officers***

 

**Andrew A. Davis (born 06/25/63, Davis Funds officer since 1997).**See description in the section on Inside Directors.

 

**Christopher C. Davis (born 07/13/65, Davis Funds officer since 1997).**President or Vice President of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Chairman, Davis Selected Advisers, L.P., serves as an executive officer in certain companies affiliated with the            Adviser, including sole member of the Adviser’s general partner, Davis Investments, LLC; Employee of Shelby Cullom Davis & Co. (registered broker/dealer); Director of the Selected Funds (consisting of three portfolios), Davis Variable Account Fund, Inc. (consisting of three portfolios), Davis New York Venture Fund, Inc. (consisting of four portfolios); Director of Washington Post Co. (newspaper publisher). 

**Kenneth C. Eich (born 08/14/53, Davis Funds officer since 1997).**Executive Vice President and Principal Executive Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Chief Operating Officer, Davis Selected Advisers, L.P., and also serves as an executive            officer in certain companies affiliated with the Adviser. 

 

**Douglas A. Haines (born 03/04/71, Davis Funds officer since 2004).**Vice President, Treasurer, Chief Financial Officer, Principal Financial Officer, and Principal Accounting Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice President and Director of            Fund Accounting, Davis Selected Advisers, L.P. 

 

**Sharra L. Haynes (born 09/25/66, Davis Funds officer since 1997).**Vice President, Chief Compliance Officer of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice President and Chief Compliance Officer, Davis Selected Advisers, L.P., and also serves as an executive            officer in certain companies affiliated with the Adviser.

 

**Thomas D. Tays (born 03/07/57, Davis Funds officer since 1997).**Vice President and Secretary of each of the Davis Funds (consisting of 13 portfolios), Selected Funds (consisting of three portfolios), and Clipper Fund, Inc. (consisting of one portfolio); Vice President, Chief Legal Officer and Secretary, Davis Selected Advisers, L.P., and also serves as an executive officer            in certain companies affiliated with the Adviser.

 

**Arthur Don (born 09/24/53, Davis Funds officer since 1991).**Assistant Secretary (for clerical purposes only) of each of the Davis Funds and Selected Funds; Partner, Seyfarth Shaw LLP (a law firm); counsel to the Independent Directors and the Davis Funds.

 

72

 

 

----

**DAVIS SERIES, INC.**

 

 

| **Investment Adviser**                                                         |   |
|--------------------------------------------------------------------------------|--------|
| Davis Selected Advisers, L.P. (Doing business as “Davis Advisors”) |   |
| 2949 East Elvira Road, Suite 101                                               |   |
| Tucson, Arizona 85756                                                          |   |
| (800) 279-0279                                                                 |   |
|                                                                           |   |
| **Distributor**                                                                |   |
| Davis Distributors, LLC                                                        |   |
| 2949 East Elvira Road, Suite 101                                               |   |
| Tucson, Arizona 85756                                                          |   |
|                                                                           |   |
| **Transfer Agent**                                                             |   |
| Boston Financial Data Services, Inc.                                           |   |
| c/o The Davis Funds                                                            |   |
| P.O. Box 8406                                                                  |   |
| Boston, Massachusetts 02266-8406                                               |   |
|                                                                           |   |
| Overnight Address:                                                             |   |
| 30 Dan Road                                                                    |   |
| Canton, Massachusetts 02021-2809                                               |   |
|                                                                           |   |
| **Custodian**                                                                  |   |
| State Street Bank and Trust Co.                                                |   |
| One Lincoln Street                                                             |   |
| Boston, Massachusetts 02111                                                    |   |
|                                                                           |   |
| **Counsel**                                                                    |   |
| Seyfarth Shaw LLP                                                              |   |
| 131 South Dearborn Street, Suite 2400                                          |   |
| Chicago, Illinois 60603-5577                                                   |   |
|                                                                           |   |
| **Independent Registered Public Accounting Firm**                              |   |
| KPMG LLP                                                                       |   |
| 707 Seventeenth Street, Suite 2700                                             |   |
| Denver, Colorado 80202                                                         |   |

 

 

 

 

 

***For more information about Davis Series, Inc., including management fee, charges, and expenses, see the current prospectus, which must precede or accompany this report. The Funds’ Statement of Additional Information contains additional information about the Funds’ Directors and is available without charge upon request by calling 1-800-279-0279 and on the Funds’ website at            www.davisfunds.com. Quarterly Fact sheets are available on the Funds’ website at www.davisfunds.com.***

 

 

73

 

 

 

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**ITEM 2. CODE OF ETHICS**

 

Not Applicable

 

**ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT**

 

The registrant’s board of directors has determined that independent trustee Marsha Williams qualifies as the “audit committee financial expert”, as defined in Item 3 of form N-CSR.

 

**ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 

Not Applicable

 

**ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS**

 

Not Applicable

 

**ITEM 6. SCHEDULE OF INVESTMENTS**

 

Not Applicable. The complete Schedule of Investments is included in Item 1 of this for N-CSR

 

**ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES**

 

Not Applicable

 

**ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES**

 

Not Applicable

 

**ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANIES AND AFFILIATED PURCHASERS**

 

Not Applicable

 

**ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

 

There have been no changes to the procedure by which shareholders may recommend nominees to the registrant’s Board of Trustees.

 

**ITEM 11. CONTROLS AND PROCUDURES**

 
|   | (a) | The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3 (c) under the Investment Company Act of 1940, as amended) are effective as of a date within 90 days of the filing date of this report. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|   | (b) | There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

----

 

 

**ITEM 12. EXHIBITS**

 

(a)(1) Not Applicable

 

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached.

 

(a)(3) Not Applicable

 

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are attached.

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

DAVIS SERIES, INC.

 
| By     | /s/ Kenneth C. Eich         |   |
|--------|-----------------------------|--------|
|   | Kenneth C. Eich             |   |
|   | Principal Executive Officer |
|        |                             |        |  |

 

Date: September 3, 2009

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 
| By     | /s/ Kenneth C. Eich         |   |
|--------|-----------------------------|--------|
|   | Kenneth C. Eich             |   |
|   | Principal Executive Officer |
|        |                             |        |  |

 

Date: September 3, 2009

 
| By     | /s/ Douglas A. Haines       |   |
|--------|-----------------------------|--------|
|   | Douglas A. Haines           |   |
|   | Principal Financial Officer |
|        |                             |        |  |

 

Date: September 3, 2009